The US government has seized over $1 billion in Bitcoin, claiming the funds once belonged to the notorious dark web marketplace Silk Road.
The seizure occurred on Tuesday when observers noticed a digital wallet at the address “1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx” had mysteriously transferred 69,369 bitcoins—or what currently amounts to $1.04 billion.
On Thursday, the Justice Department revealed it had filed a civil complaint to formally confiscate the bitcoins—the largest cryptocurrency seizure in the DOJ’s history. According to federal investigators, the massive trove of bitcoin sources back to the Silk Road marketplace, which the US shut down in October 2013.
“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,” US Attorney David Anderson of the Northern District of California said in the announcement.
Silk Road was once home to thousands of drug dealers and shady merchants, hawking their illegal products to over 100,000 buyers on the dark web. The site also helped process Bitcoin payments between customers and sellers by laundering the funds in order to prevent observers from tracking the transactions over the Bitcoin blockchain.
“All told, Silk Road generated sales revenue totaling over 9.5 million Bitcoin, and collected 26 commissions from these sales totaling over 600,000 Bitcoin,” the Justice Department said in its civil complaint.
The FBI previously confiscated some of the 600,000 bitcoins Silk Road made via the site. But earlier this year, a hired third-party firm helped federal investigators identify 54 previously undetected cryptocurrency transactions tied to the marketplace, which led them to the seize the 69,369 bitcoins.
According to the complaint, the wallet that held the funds belonged to “Individual X,” who was able to hack Silk Road and steal the bitcoins, possibly back in 2013 or 2012. On Tuesday, Individual X signed a consent agreement with the US government to hand over the funds.
In 2013, a single bitcoin was only worth a few hundred dollars. Since then the cryptocurrency’s value has ballooned to about $15,000 per coin. The Justice Department’s civil complaint is now calling on the US court to finalize the forfeiture of the massive fortune to the federal government. What will then happen to the funds remains unclear.
