A hacker who breached the security of Silk Road had the funds under his control. Another wallet, which the US government controls, received the transaction.
On November 5th, it became public knowledge that the US criminal authorities seized 69,370 BTC related to the Silk Road case.
The Attorney General’s Office for the Northern District of California released a document on November 3rd. The record indicates that the defendant – identified as “Individual X” – signed an agreement approving the seizure of the funds.
On the same date, the US government made the transaction from address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbh to a wallet that it controls.
The assets seized include about 69,370 BTC and equal amounts of Bitcoin Gold (BTG), Bitcoin SV (BSV), and Bitcoin Cash (BCH). The distribution method of these forks allowed the Bitcoin holders to claim equivalent amounts of cryptocurrencies on each network.
The authorities presumed that this address was under the control of Ross Ulbricht, so the story takes on new dimensions. However, the investigation revealed that Individual X managed to breach the security of Silk Road and take control of the wallet of his own free will.
Ulbricht became aware of the attack, which occurred at an unspecified time between 2011 and 2013. The now convict failed in his attempt to threaten Individual X to return cryptocurrencies. Although the hacker managed to rob Silk Road, he has not spent the bitcoins for at least eight years. It is now that the authorities have removed them from this wallet and seized them.
The judicial authorities seized the funds as these BTCs are involved in the trade of illegal chemicals. Furthermore, they say that Individual X obtained them under a hacking method, which is also illegal.
Blockchain Surveillance Tools Bear Fruit
Chainalysis, a blockchain analytics company, said that agents from the US Internal Revenue Service (IRS) criminal investigation division used the company’s services to track Silk Road transactions. In this way, they were able to identify 54 previously undetected fraudulent transactions.
The company highlights that the confirmation of this transfer for almost USD 1 billion came in minutes, thus demonstrating that cryptocurrencies are a unique and efficient technology.
They said that the confiscated bitcoins will become part of the Treasury Seizure Fund (TFF). There, the authorities will use them to improve blockchain surveillance tools.
Strong Position on Case of Ross Ulbricht
According to the US Department of Justice, Silk Road generated about 9.5 million BTC and collected fees of more than 600,000 BTC. Besides, it was responsible for 20% of Bitcoin transactions at the time.
Ross Ulbricht used a Bitcoin transaction mixer to obfuscate the identities of the website’s traders. Also, the authorities maintain their position on the charges of conspiracy, drug trafficking, and money laundering, among others. For these reasons, he received a sentence of two life sentences and 40 years in prison in 2013.
Some organizations advocate for Ulbright’s release, making public requests for the authorities to pardon his sentence, of which he has already served seven years.
Although it is still necessary to recover 400,000 BTC related to the Silk Road case, this new seizure has become a milestone in the history of Bitcoin. US judicial authorities now control the funds from the fourth address with the most bitcoins of the entire network.
By Alexander Salazar
