The US has seized more than $1 billion worth of bitcoin connected to the Silk Road criminal syndicate, the Justice Department announced Thursday.
The funds were taken by law enforcement on Tuesday after being traced to a bitcoin address by an unnamed “Individual X,” according to a US Department of Justice press release.
“It was further determined that Individual X had hacked the funds from Silk Road,” the DOJ said.
The DOJ said it filed a civil complaint that the funds are subject to forefeiture, adding that it expects to prove the case to the court.
“Silk Road was the most notorious online criminal marketplace of its day,” said US Attorney Kelly Anderson of the Northern District of California.
“The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go? Today’s forfeiture complaint answers this open question at least in part. $1 billion of these criminal proceeds are now in the United States’ possession.”
In 2015, Ross Ulbricht was sentenced to life in prison after being convicted of masterminding the criminal website Silk Road, which sold $200 million in drugs to customers worldwide.
Ulbricht, who ran Silk Road under the alias “Dread Pirate Roberts” and was accused of commissioning five murders at a cost of $650,000, was sentenced to two life sentences for narcotics distribution and criminal enterprise.
Chainalysis, a blockchain analysis service that helped American investigators, said: “Earlier this year, IRS-CI agents used Chainalysis to analyze bitcoin transactions executed by Silk Road and identified 54 previously undetected bitcoin transactions representing the proceeds of unlawful activity. They also found that a hacker, known as Individual X, stole those funds from Silk Road.
“According to Chainalysis data, Silk Road accounted for nearly 20% of total bitcoin economic activity at its peak in 2013. Silk Road’s economic activity reached $435m total (calculated based on the price of bitcoin at the time), with a peak of just under $40m in monthly volume in September of 2013.”
The $1bn value of the seizure is equivalent to the total value of all cash and cash equivalents seized by the federal government in 2015, the most recent year for which records are available, The Guardian reports.
– Reporting by AFP and The Guardian