US Government Seizes 69,270 Bitcoin in Largest Ever Cryptocurrency Bust
Remember the $1 billion worth of Bitcoin belonging to Silk Road that moved this week? Well, it turns out it was the US authorities doing the moving.
The US is suing for the forfeiture of 69,270 BTC, worth more than $1 billion at current prices. The Justice Department seized these Bitcoins on Tuesday, marking the largest crypto bust the government has ever made.
These BTC are linked to the Silk Road darknet marketplace that the authorities shut down seven years ago.
“The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go?” the authorities said in the statement. “Today’s forfeiture complaint answers this open question at least in part.”
The announcement came amidst Bitcoin’s resurgence to a new 2020 high of nearly $16,000 before retracing a bit today around $15,500.
Bitcoin is on its third such bull cycle, which sees positive momentum from the continued uncertainty around the US elections, weak US dollar, increased institutional and mainstream adoption, and the macro fundamentals that are fueling this rally.
It “almost feels like Bitcoin’s perfect storm,” said Guy Hirsch, managing director for the U.S. at eToro.
The Silk Road
The Bitcoins were seized from an alleged hacker identified as Individual X, “whose identity is known to the government,” as per the statement.
The document points out that the law enforcement officers used a third-party bitcoin attribution company this year to analyze Bitcoin transactions executed by Silk Road and detected 54 transactions that were sent from BTC addresses controlled by Silk Road to two Bitcoin addresses that helped the agents trace them to the alleged hacker.
The Silk Road website described as “the most sophisticated and extensive criminal marketplace on the Internet” by the authorities was operated by Ross Ulbricht from 2011 to 2013. During this time, the darknet marketplace was used to generate about $1.2 billion in illicit sales.
In 2015, Ulbricht was convicted by a New York federal jury of seven criminal counts.
According to the crypto researcher, Chainalysis that assisted law enforcement in tracking down the funds, Silk Road accounts for almost 20% of total Bitcoin economic activity at its peak in 2013.