A long-dormant Bitcoin wallet was emptied of more than 69,000 BTC on election day, leading to claims that hackers had just gotten away with a heist worth nearly $ 1 billion. So who is it?
At the same time that media attention was focused on the 2020 presidential election, someone came up with what appeared to be the perfect heist: hacking into a cryptocurrency wallet containing nearly $ 1 billion (£ 760 million) in Bitcoin. The wallet in question, 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx to be formal, had been inactive for years after the FBI’s closure of the Silk Road crime market. Ross Ulbricht, also known as Dread Pirate Roberts, the founder of Silk Road, was arrested in 2013 and convicted of money laundering and hacking in 2015.
Ulbricht was sentenced to a double life sentence.
That Bitcoin wallet has since been of great interest to hacker groups, which is not surprising given that it would be one of the most profitable cyber-thefts in the world if someone could crack the passcode. This turned out not to be an easy task, so the money remains for all these years.
Until now, it is. Until Election Day 2020, when someone managed to empty their wallet and transfer more than 69,000 BTC to another wallet.
So who got their hands on the money? Speculation has been rife since Tuesday, pretty much evenly split among those who thought the owners of the original hacking group decided to move it before someone else hacked and stole it, and the latter actually happened before they could. The truth, however, would seem to be that it was neither.
According to a November 5 press release from US Attorney for the Northern District of California, David Anderson, it was the feds that took the money. Addressing the question of where the criminal proceeds of the Silk Road enterprise went, Anderson said: “1 billion dollars of these criminal proceeds are now in the possession of the United States.”
It appears that the Internal Revenue Service Criminal Investigation Bureau was able to trace the funds from Silk Road, following the trail of 54 previously unidentified Bitcoin transactions involving money stolen from Silk Road between 2012 and 2013.
This means that we now know this wasn’t the heist of the century, that the hackers hadn’t cracked the wallet passcode. What we don’t know is where the money will go. Although the money has been seized, it has not yet been proven that these funds should be forfeited and become federal government property. I suspect, given what is known so far and the nature of the detailed investigations to date, that it is only a matter of time before the courts confirm this confiscation.