Here's Why the US Government Seized $1 Billion in Bitcoin From Silk Road

With the collaboration of a hacker called Individual X.
Loukia Papadopoulos

Earlier in November 2020, news broke out of $1 billion in bitcoin being transferred out of an unknown wallet that had been dormant since 2015. People around the world started to speculate as to who could have done such a thing.

Now, the U.S. government has come forward to say that it was responsible for the much-talked-about transaction. The seizure that saw thousands of Bitcoins captured from the dark web drug marketplace Silk Road represents the largest seizure of cryptocurrency in the history of the Department of Justice.

“Silk Road was the most notorious online criminal marketplace of its day,” said U.S. Attorney Anderson in a statement.“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.”     

Silk Road was used by notorious criminals to buy and sell drugs and other illegal goods. Bitcoin was used prominently for those transactions due to its ability to anonymously fund those activities.

Thankfully, Silk Road was closed by U.S. federal authorities in 2013. At the time of its closure, Silk Road had nearly 13,000 listings for drugs and other illegal services including murder for hire. Its founder Ross Ulbricht was convicted of seven criminal counts, including conspiracy to distribute narcotics and money laundering, and sentenced to life in prison in 2015.    

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But how was the bitcoin seized? Some time in 2012 or 2013, an “Individual X” allegedly hacked into Silk Road’s payments system. Ulbricht then threatened the hacker for the return of the cryptocurrency with no luck. On November 3rd, Individual X agreed to transfer the funds to the U.S. government. It remains unknown whether Individual X was arrested or whether he performed the transfer of his own volition. 

In October of 2021, Bitcoin breached its $64,900 April ceiling, surging past $65,000. To understand more about cryptocurrencies and where they may go in near future, give this a read

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