Largest cryptocurrency seizure: $1,000,000,000 was seized from the wallet of the Silk Road

This week, the cryptocurrency world attracted attention to a major move on the night of the US presidential election: someone drained a 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx bitcoin wallet, which held around a billion dollars.

Saturday, November 7, 2020, 4:14 GMT

It turned out that the wallet was connected to the Silk Road darknet marketplace, which was locked by the authorities back in 2013, when people were making crazy hypotheses on who did it and why. Let me warn you that the industry has sold a range of illicit products and services to its customers, ranging from drugs and ransomware to contract killings. Ross Ulbricht, head of Silk Road, was arrested and convicted, then served in the United States, to double life imprisonment in 2015.

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It turned out that law enforcement officers uncovered a billion dollars in cryptocurrencies, formerly owned by Silk Path. Therefore, US Counsel David Anderson notes that, after the shutdown of the trading floor and the conviction of Ulbricht, the authorities were left with the question “where did the money go?” The money was nevertheless uncovered after several years of investigation and is still seized by the US government.

Silk Road operators guided bitcoin transfers through a special toggle-switch service, according to official records, which made it exceedingly difficult to track the funds. At the same time, Silk Road is estimated to have “earned” more than 600,000 bitcoins on commissions during its lifetime, although the authorities eventually managed to remove only 174,000 bitcoins.

Using the aid of Chainalysis experts, law enforcement officials find that 54 transfers were made back in 2013, worth 70,411.46 bitcoins, which were delivered to two addresses. Although these transfers did not exist in the Silk Road ledger itself, it was believed that someone had stolen the money.

Most of these funds, amounting to 69,471,082201 bitcoins, were sent to the aforementioned wallet in April 2013, indicated as ‘1HQ3’ in the securities (according to the first characters of the address). That is, it ended up in this wallet with 69,370,22491543 bitcoins-around a billion US dollars. In 2015, an unnamed hacker tried to liquidate some of the stolen funds through the BTC-e cryptocurrency exchange, which was eventually closed by the US authorities for money laundering.

Investigators write that an anonymous hacker featured in the legal records of Person X was interested in wallet-related transactions. The IRS and the Department of Justice therefore assume that Person X simply stole Silk Road’s cryptocurrency.

Ulbricht, according to the investigation, created Person X’s online persona and confronted him, demanding the return of the cryptocurrency. Person X, though, did not refund the cryptocurrency, maintained it for itself, but never spent it, “write the law enforcement officers.”

It is confirmed that Person X, who was finally identified by law enforcement officials, signed an agreement with the authorities in early November 2020 and presented them with all the contents of the “1HQ3” wallet. The Ministry of Justice will now have to show that the cryptocurrency stolen was actually confiscated and related to the Silk Path.