US authorities seize $1 billion worth of Silk Road Bitcoins

US Attorney Anderson said in a statement:

“Silk Road was the most notorious online criminal marketplace of its day. 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.”

The Internal Revenue Service’s Criminal Investigation unit was responsible for finding the 69,000 seized Bitcoins. Agents from the unit started analyzing Silk Road’s digital wallets earlier this year and found 54 previously undetected transactions. They determined that Ulbricht didn’t make those transactions and that they were conducted by a hacker they’re referring to as “Individual X” who stole the Bitcoins in 2012 and 2013.

The DOJ says Individual X agreed to hand over the coins they stole after authorities tracked them down, signing a Consent and Agreement to Forfeiture with the Northern District of California’s US Attorney’s Office on November 3rd. It’s worth noting that Ulbricht was aware of the hacker’s online identity and allegedly threatened them for the Bitcoin’s return. Individual X, however, refused to give in — they simply sat on that enormous amount of money and didn’t spend it.

“Ulbricht became aware of Individual X’s onlineidentity and threatened Individual X for return of the cryptocurrency to Ulbricht. Individual X did notreturn the cryptocurrency but kept it and did not spend it.”

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

The DOJ didn’t reveal what it plans to do with the massive pile of digital coins, but the government auctioned off the other Silk Road-related coins it previously seized. How much the government can get from it remains to be seen, though, since releasing too many Bitcoins to buyers could lower its value.