U.S. authorities seize Silk Road‑linked Bitcoin worth more than $1 billion — 69,370 BTC

On November 3, the U.S. Department of Justice seized 69,370 BTC. These coins originate from the Silk Road darknet marketplace.

About $1 billion of Bitcoin tied to the Silk Road marketplace was seized by the U.S. on Tuesday https://t.co/01FIMgW14Y

— Bloomberg Crypto (@crypto) November 5, 2020

Authorities also seized an equivalent amount in Bitcoin Cash, Bitcoin SV and Bitcoin Gold. The agency emphasised that this was the largest sum in cryptocurrency ever seized by U.S. authorities.

According to the court filing, the owner of the address, who goes by the alias Invididual X, hacked Silk Road and stole these coins. Earlier, we reported that they were withdrawn from the Silk Road darknet market on May 6, 2012. A year after the withdrawal they were moved to the address, where they remained until seizure.

On November 3, Invididual X signed an agreement to hand over the coins to law enforcement. On November 4, the price of the coins surpassed $1 billion as Bitcoin’s price rose.

Individual X managed to hack nearly $1 billion from the old Silk Road Bitcoin accounts.

Then the govt found Individual X and took the Bitcoin back, the DOJ announced today.

Who is Individual X? pic.twitter.com/N0Rra8EqOR

— Nathaniel Popper (@nathanielpopper) November 5, 2020

The document states that Silk Road founder Ross Ulbricht, serving a life sentence, threatened Invididual X in an attempt to recover the funds, but was unsuccessful.

«Ulbricht became aware of Individual X’s online
identity and threatened Individual X for return of the cryptocurrency to Ulbricht. Individual X did not
return the cryptocurrency but kept it and did not spend it.»

— Alon Gal (Under the Breach) (@UnderTheBreach) November 5, 2020

Chainalysis assisted authorities in tracing 54 Silk Road transactions.

This week, the cryptocurrency world reacted to the movement of over $1B in BTC from a long-dormant wallet connected to the Silk Road darknet market. The DOJ announced today this transfer was in fact a govt seizure of funds. Read our blog for the details! https://t.co/JGzZYGBSIW

— Chainalysis (@chainalysis) November 5, 2020

It is believed that Silk Road earned 614 000 BTC in fees, though only 174 000 BTC were seized from Ross Ulbricht at the time of his arrest.

The History of Silk Road: How Bitcoin Elevated the Darknet Economy to a New Level

In the past, U.S. authorities had sold Silk Road Bitcoin at auction. In July 2014, venture capitalist Tim Draper bought 30 000 BTC seized from the darknet marketplace at $632.

Earlier, the wallet.dat file for address Invididual X was sold on hacker forums for several years. When the 69,370 BTC were moved to another address, many concluded that someone had managed to obtain the private key.

69,370 BTC began moving on one of the richest wallets. Hackers had been breaking into it for years

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