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Federal officials seized more than $ 1 billion worth of stolen bitcoins linked to the closed black market website Silk Road.
According to the United States Department of Justice, Silk Road has allowed a range of criminal activities, including the sale of illegal drugs and hacking. Its founder Ross Ulbricht was arrested in San Francisco in 2013 and convicted in 2015 by a New York federal jury of several criminal charges, including conspiracy to distribute narcotics and money laundering, according to the agency. he is now he is serving two life sentences. The FBI shut down Silk Road in 2013.
Bitcoin is a virtual currency traded on the Internet; it is not connected to an established government or private organization. Because they are not hosted in banks, bitcoins are difficult to track, making the cryptocurrency ripe for hacking or using in illegal activities.
Goods and services on Silk Road were paid for using bitcoin. At its peak, Silk Road generated more than $ 9.5 million in sales and its owner raised more than 600,000 bitcoins in commissions, court documents show. At least six people died of an overdose from drugs purchased on the website.
“Silk Road was the most famous online crime market of its time,” US attorney David Anderson said in a statement Thursday. “The success of the trial against the founder of Silk Road in 2015 left a billion dollar question open. Where did the money go? 1 billion dollars of this criminal proceeds are now in the possession of the United States.”
The Department of Justice did not immediately respond to requests for comment on Friday.
Transaction tracking
The Department of Justice and Internal Revenue Service investigators have worked to monitor bitcoin-related transactions on the Silk Road. The investigation found more than 50 previously undetected transactions.
These transactions were then traced to a hacker, whose identity, although known to the authorities, was not disclosed publicly. Authorities said the hacker stole 69,000 bitcoins from Silk Road between 2012 and 2013. Department of Justice officials on Wednesday took those bitcoins into custody in what they call the “largest cryptocurrency seizure in history.”
“The proceeds of the crimes should not remain in the hands of thieves,” Kelly Jackson, an IRS special agent, said in a statement.
Ulbricht discovered the hacker’s online identity and threatened the individual to return the digital money, court documents show. But the hacker kept the cryptocurrency in a digital wallet without spending it, which is why bitcoins have gone unnoticed for so long.
When government officials seized thousands of bitcoins from Ulbricht when he was arrested seven years ago, they auctioned the cryptocurrency in 2014 and 2015. It’s unclear whether the Justice Department will do the same with this week’s seizure.
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