Feds Seize $1 Billion in Bitcoin Tied to the Dark Web’s Silk Road Marketplace

The U.S. government revealed this week that it seized $1 billion in Bitcoin from the Silk Road, a dark web drug marketplace that was shut down by the FBI in 2013. The funds were uncovered through an agreement between the government and an unnamed hacker that acquired the bitcoin when the marketplace was still active.

According to a report by the Verge, the U.S. government has seized $1 billion in Bitcoin from the Silk Road, a darknet drug marketplace that was shut down in 2013.

United States Attorney David L. Anderson said that the seizure of the funds has closed the door on a question that has lingered since the closure of the marketplace over seven years ago.

“Silk Road was the most notorious online criminal marketplace of its day,” Anderson said.  “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 press release suggests that law enforcement officials were able to seize the cryptocurrency on November 3 from an individual that had acquired the funds from the Silk Road by allegedly hacking the site. It is not clear at this time if the unnamed hacker has been arrested.

The complaint alleges that these funds were traced to a bitcoin address.  Further investigation of that bitcoin address by the United States Attorney’s Office and IRS CI agents revealed that the funds were connected to Individual X.  It was further determined that Individual X had hacked the funds from Silk Road.  Pursuant to that investigation of the hack, law enforcement seized several thousand Bitcoins on November 3, 2020.  On November 4, 2020, the seized Bitcoin had a value of over $1 billion.

The unnamed hacker was reportedly threatened by Silk Road Founder Ross Ulbricht after Ulbricht realized that the funds had been compromised. Ulbricht is currently serving a double life sentence plus 40 years in the United States Penitentiary in Tuscon, Arizona, for crimes connected to the Silk Road.