The US government confiscates the fourth-most bitcoin address in the world


Yesterday afternoon it became known that 69,370 BTC belonging to the Silk Road case were confiscated by the US criminal authorities.

According to a document released by the Attorney General’s Office for the Northern District of California, on November 3 the defendant – referred to as “Individual X” in the minutes – signed an agreement approving the confiscation of funds.

On the same day, the transaction was made from the address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbh, reported by CriptoNoticias and widely spread across the ecosystem, to a wallet that is now known to be controlled by the US government.

Among all the assets seized there are about 69,370 BTC and equal quantities of Bitcoin Gold (BTG), Bitcoin SV (BSV) and Bitcoin Cash (BCH), a fork whose distribution method has allowed the holders of Bitcoin claims equivalent amounts of cryptocurrency on each network.

The story takes on new dimensions as this address was assumed to be under the control of Ross Ulbricht. 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.

When Ulbricht learned of the attack, which took place sometime between 2011 and 2013, the now convicted man tried to threaten individual X with returning the cryptocurrencies, but was unsuccessful. Even though the hacker managed to rob Silk Road, for at least 8 years it has not spent its bitcoins; so far they have been removed from this wallet and confiscated by the authorities.

Among the reasons that the judicial authorities adhere to to confiscate the funds, they list not only that these BTCs are involved in the illegal trade in illicit chemicals, but that they were also obtained by Individual X by the illegal hacking method.

According to other reports, an encrypted file circulating in the Deep Web presumably it contained the private keys of this wallet. Since then, hackers have competed to decrypt the file and obtain the bitcoins, but it has not been confirmed whether the file actually had the promised content.

At first it was assumed that the authorities had decrypted the file, but it is now known they found the true identity of the wallet holder, getting legal pressure to deliver the bitcoins.

Chainalysis: blockchain surveillance tools pay

Blockchain analytics firm Chainalysis said in an explanatory article that the U.S. government used tools provided by the company to gather evidence on the case.

As Chainalysis summarizes, agents in the criminal investigation division of the United States Revenue Service (IRS) used the services of Chainalysis to monitor the Silk Road transactions, managing to identify 54 previously undetected fraudulent transactions.

The watchdog firm points out that by using the right tools, authorities can make cryptocurrencies more transparent and track illicit funds. They also point out that this nearly $ 1 billion equivalent transfer in Bitcoin was confirmed in minutes, demonstrating how cryptocurrencies are a unique and efficient technology.

The IRS used Chainalysis tools to find the hacker. Source: CriptoNoticias.

As they point out, the confiscated bitcoins will become part of the Treasury Seizure Fund (TFF), where they will be used to improve blockchain spying tools.

“The TFF funds innovation programs for prosecution, such as blockchain analytics tools and training that will help agents identify and obtain illicit funds,” they say, also noting that similar actions have been conducted in relation to Korea Hack during this year. of the North and financing of terrorism.

Solid position on the Ross Ulbricht case

According to authorities, Silk Road has generated around 9.5 million BTC, as well as charging fees for over 600,000 BTC and currently being responsible for 20% of Bitcoin transactions, according to the US Department of Justice.

In addition to using a Bitcoin transaction mixer to obfuscate the identities of the website’s merchants, the authorities maintain their position on allegations of conspiracy, drug trafficking and money laundering, among other allegations that fall on Ross Ulbricht and for which He was sentenced in 2013 to two life sentences and 40 years in prison.

Currently some organizations are asking for his release, making public requests for sentencing for the sentence of Ulbricht, who has already served 7 years in prison.

400,000 BTC still remain to be recovered from the Silk Road case, while with this new seizure a milestone in the history of Bitcoin is reached, as the judicial authorities of the United States now control what is the 4th address with the highest number of bitcoins in the entire network.

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