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The US government has seized over $ 1 billion worth of bitcoin from previously undetected transactions associated with the Silk Road market and is now seeking the confiscation of the cryptocurrency.
The United States confiscates $ 1 billion worth of Bitcoin from Silk Road
The U.S. government filed a lawsuit for the confiscation of bitcoin currently worth more than $ 1 billion that it seized on Tuesday, according to the court document. The Justice Department said Thursday that this bitcoin seizure is the largest the United States has ever done. The seized “Defendant Property” includes bitcoin and its forked coins, which were:
Approximately 69.370.22491543 bitcoin (BTC), bitcoin gold (BTG), bitcoin SV (BSV), bitcoin cash (BCH), obtained from 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbh.
Twitter bot @whale_alert reported the transaction on Tuesday, prompting speculation as to why the coins suddenly moved out of the dormant wallet. Today, the mystery is solved as law enforcement was actually transferring the coins to a government-controlled wallet.
Following the DOJ announcement, blockchain data analytics firm Chainalysis explained that “law enforcement has used Chainalysis tools and investigative assistance to identify the largest cryptocurrency wallets with links to Silk Road.” They analyzed “bitcoin transactions performed by Silk Road and identified 54 previously undetected bitcoin transactions representing the proceeds of illegal activities. They also found that a hacker, known as Individual X, stole those funds from Silk Road, ”the company explained.
The 54 transactions, worth 70,411.46 BTC, were sent from Silk Road’s bitcoin addresses to two bitcoin addresses, the court document describes, adding that approximately 69,471.08 BTC were then sent to 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx. The court document refers to this address as “1HQ3” for short.
Since 1HQ3, 101 BTC has been sent to BTC-e, the defunct Russian exchange. About 69,370 BTC remained in 1HQ3 and were subsequently seized by the government. The address also contains approximately 69,370 BCH, BTG and BSV prior to the government seizure.
The court document states that “individual X, whose identity is known to the government” was in control of address 1HQ3. The DOJ claims that this person “was able to hack Silk Road and gain unauthorized and illegal access to Silk Road and then steal illicit cryptocurrency from Silk Road and transfer it to Individual X-controlled wallets.”
The government also claims that the founder of the Silk Road market Ross Ulbricht “became aware of the online identity of individual X and threatened individual X with the return of the cryptocurrency to Ulbricht”. However, “Individual X did not return the cryptocurrency, but kept it and did not spend it.” Ulbricht was convicted by a federal jury in February 2015 and sentenced to a double life sentence.
On Tuesday, Individual X signed a consent and confiscation agreement with the U.S. Attorney’s Office, Northern California District, the court document continues, adding:
On November 3, 2020, the United States took the defendant property from 1HQ3 into custody.
What do you think of the US government that seized $ 1 billion worth of bitcoin? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Chainalysis
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