The US government is suing for the formal forfeiture of $1 billion worth of Bitcoin connected to the darknet marketplace, Silk Road.
Silk Road was an online darknet marketplace where different kinds of products and services could be purchased, many of which could not be found on websites. Users of the platform would use Bitcoin to make purchases on the platform. The US government eventually busted the operations, arresting the founders.
Despite its success in arresting the operators of the website, a billion-dollar question remains; where did the money made on the website go?
US attorney David Anderson says,
“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. $1bn of these criminal proceeds are now in the United States’ possession.”
Analysts observed a transfer of Bitcoin on the blockchain which indicates that a Silk Road co-conspirator attempted to cash out or that hackers had transferred the funds.
The Department of Justice states that the real holder of the funds is called “Individual X”, who gave themselves away when trying to liquidate a small portion of the money in 2015.
According to the criminal complaint,
“On approximately 23 April 2015, [the bitcoin account] sent 101 bitcoin (approximately $23,700) to BTC-e, a company that provided bitcoin-related services and operated as an unlicensed cryptocurrency exchange,”
Chainalysis reveals that Silk Road accounted for 20% of total bitcoin economic activity in 2013. Its activity reached $435 million in total with $40 million in monthly volume in September 2013. This was one of the big reasons media houses attempted to taint Bitcoin, dubbing it as a tool for criminals. However, since the Silk Road days, Bitcoin has gained a better reputation among masses as a medium for safe and quick money transfer.