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The DOJ Seized Over a Billion Dollars From Silk Road’s Bitcoin Coffers

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Illustration for article titled The DOJ Seized Over a Billion Dollars From Silk Roads Bitcoin Coffers

Photograph: Spencer Platt / Employees (Getty Photos)

A $1 billion transaction that flowed out of a dormant bitcoin pockets allegedly belonging to Silk Street founder Ross Ulbricht made waves within the crypto world this week, inflicting some to suspect the founder himself was making strikes from jail. No such luck, nevertheless: It was the Division of Justice seizing the darkish market’s good points in a transfer akin to repossessing a mobster’s (very costly) yacht.

The pockets, which was related to the underground drug and weapons market referred to as the Silk Street, sat quiet since 2013. Accessible solely with a non-public key, the cash slowly gained in worth and as bitcoin hit a excessive of $15,000 this week, it appears to be like just like the DOJ desires to money out.

“Silk Street was essentially the most infamous on-line prison market of its day,” United States Lawyer David L. Anderson mentioned in an announcement. “The profitable prosecution of Silk Street’s founder in 2015 left open a billion-dollar query. The place did the cash go? At present’s forfeiture grievance solutions this open query no less than partly. $1 billion of those prison proceeds at the moment are in the US’ possession.”

When Ulbricht went to jail in 2015, the IRS started analyzing inflows and outflows to wallets related to the Silk Street. Like net addresses, wallets have distinctive IDs, and whereas they will’t be traced to anyone individual they are often analyzed for connections to identified wallets. On this case, the $1 billion got here from a hacker—referred to as Particular person X in a DOJ press release—who had damaged into the Silk Street’s servers and stolen BTC from the location. Particular person X allegedly turned the funds over to the DOJ.

“On the time it was taken down in 2013, Silk Street had practically 13,000 listings for managed substances and lots of extra listings providing unlawful companies, resembling pc hacking and homicide for rent, which generated gross sales income totaling over 9.5 million Bitcoins and commissions from these gross sales totaling over 600,000 Bitcoins,” wrote the DOJ.

“Prison proceeds shouldn’t stay within the fingers of the thieves. Via CI’s experience in following the cash, we have been capable of monitor down the illicit funds,” mentioned IRS-CI Particular Agent in Cost Kelly R. Jackson.

The BTC is now U.S. property. Appears to be like like Ulbricht, a daring libertarian, lastly paid his taxes.

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Author

John Biggs