Silk Road wallet worth more $1B possibly has been hacked

[Chris Barth]

I don't think it is a hack at all and tend to agree with the statement in the Ciphertrace article that the owner of the legacy address decided to move his Bitcoin to Bech32 address. In case there was a hack, I believe the hackers would have already made plans how to wipe the coins clean prior to moving them out of the original address. So far they are just sitting there, not going to exchanges or mixers.   

I was thinking the same. Besides, not every heavy transaction should be tagged as a "hack". Even tho they were sent to an exchange, it still isn't enough reason for such a conclusion.

[malevolent]

The funds were associated with the Silk Road website, which used Bitcoin to peddle everything from drugs to murder-for-hire until it was shut down by U.S. agents in 2013.

https://www.bloomberg.com/news/articles/2020-11-05/u-s-seeks-forfeiture-of-bitcoin-valued-at-over-1-billion

Stellar reporting from bloomberg, yet again.

https://www.documentcloud.org/documents/7319611-Complaint.html

So he got caught because he sent a small portion of the coins to his BTC-e account, one that must have been easy to tie to his real identity.

[gentlemand]

Ah. So it was stolen from Silk Road. Didn't catch that bit before. I wonder if handing it over may be the end of it for them. It's not as if Ross is going to sue them. A slightly high price to pay for an easy life.

What's the amount of American law enforcement involvement in BTC-e?

[3meek]

What a conscious hackers! At first they were able to hack into a BTC wallet... Then, oh miracle, made a trial transaction of 1 BTC! LOL... And then transferred the rest of the amount!
Well, at the end of their work they decided to return everything to the government! Well done!

How in general can believe such stories from the media?

[buwaytress]

Stellar Bloomberg job, as you said, malevolent. They never need to retract anything either, just keep the editors and Wall Street board members happy but hey, who can blame them? Been in that unenviable position before meself!

Anyway, what a month it'll be for Individual X. #noenvy

[FACE 2 FACE]

The American intelligence services noted that this is the largest amount for the entire existence of cryptocurrencies that they have confiscated. And now the most interesting thing begins - who exactly will become the owner of all this fabulous wealth ??

[malevolent]

What's the amount of American law enforcement involvement in BTC-e?

They have at least a partial BTC-e database which leaked years ago, and also possibly wex's database, this year NZ authorities have also frozen $90M worth of fiat, perhaps Americans will put their hands on it to cover a portion of the fine that BTC-e has been issued.

And now the most interesting thing begins - who exactly will become the owner of all this fabulous wealth ??

Probably the US Department of Justice? The bitcoins are going to be auctioned, of course.

[hatshepsut93]

Either chainanalysis got really strong now, or the hacker made some serious mistakes when handling the stolen coins, and it's probably the latter, because otherwise we'd see a lot of stolen coins suddenly being identified. This kinda shows us that no one is immune from mistakes, even people who are l33t enough to steal billions of dollars worth of coins.

The American intelligence services noted that this is the largest amount for the entire existence of cryptocurrencies that they have confiscated. And now the most interesting thing begins - who exactly will become the owner of all this fabulous wealth ??

Someone who will buy them from the auction, obviously. I'm sure there won't be a shortage of people willing to buy the coins, especially if they will be sold at a slightly below market price.

[Becky666]

Does this mean that there are no longer any secure vaults for crypto?

There are still very much secure crypto vaults around the industry. I think what just happened is someone not comfortable with the legacy wallet for storage and tend to move into another, which is always a recommended. The possibility of we see this a hacking scenario shows that reading is not our culture. This movement should be aim at having their funds secure into a better place without issue. Although, there have been rumors going around that the US government has made some plans to auction some of their Bitcoin in possession, but isn't clear if this is associated with the information. 

[abel1337]

Maybe it is really not hacked. Just like everyone else thinks maybe old owner finally recover his wallet for a long period of time, or maybe he will put that amount to another wallet or maybe he is up to something, maybe he will create his project and needed funds, or he will convert his bitcoin into another altcoin in the market. If government is the reason behind this   1B is really a big deal, once they finally sell it in lower amount, the chat may crash and might get dump badly I think.

[Sithara007]

Maybe it is really not hacked. Just like everyone else thinks maybe old owner finally recover his wallet for a long period of time, or maybe he will put that amount to another wallet or maybe he is up to something, maybe he will create his project and needed funds, or he will convert his bitcoin into another altcoin in the market. If government is the reason behind this   1B is really a big deal, once they finally sell it in lower amount, the chat may crush and might get dump badly I think.

I also have the same doubt. Silk Road was a very sophisticated marketplace. I don't think that it is something that Ross Ulbricht can create alone. Also, there were tens of thousands of vendors and it would have been impossible for him to manage all of them. I assume at least a dozen people were involved in running Silk Road and they vanished once Ross was caught. Probably the temptation to cash out, finally overpowered their zeal to remain anonymous.

[acquafredda]

... quite likely the "unnamed hacker" will be one of the many federal agents working undercover on Silk Road who went rogue.

... there was so much malfeasance, agency illegalities and double-crossing going on there that most of the investigation evidence was inadmissible, except the corrupt Judge who was trying Ullbricht never allowed the full story of the rogue agents to see the light of day or the government case would have collapsed

... essentially they've probably just given it time to cool off and then handed the loot over to the biggest crooks in town

Thinking more and more about this, I suspect the wallet could have belonged to one of Russ' former associates.

Variety Jones is one name that comes to mind. He was Russ' mentor and right-hand man. He was arrested 2015 in Thailand. This coincides with the seized wallet latest output, which was also in 2015 (I belive). He was later extradicted to the U.S., but is yet to be sentanced afaik.

Another possible person, albeit less likely, is Shabang. He recently confessed about his involvement in Silk Road to the Feds. He admitted working for Russ to identify vulnabilities on the site and provide technical advice and solutions. He is scheduled to recieve his sentance next month.

Another possibility is of course your theory about a rogue undercover agent. I guess we will never really know though.

The Silk Road story really facinates me. Partly because of he Gawker article in 2011, which essentially got me into bitcoin later on. But also because of Russ and his libertarian views and ideas. He was a great entrepreneur and having him locked up for the rest of his life seems like such a waste.

Today's darknet markets doesn't interest me the slightest. I can't say I know much about it, but it seems like a toxic environment with endless exit-scams.

In that conversation you can find the most intriguing version of what might have happened back then. We would probably never know the real explanation but this one stands out for me.

[figmentofmyass]

So he got caught because he sent a small portion of the coins to his BTC-e account, one that must have been easy to tie to his real identity.

that was my original assumption, and is probably the case. after reading through the pleadings though, i'm not actually sure. the US attorney only says

"individual X, whose identity is known to the government, was determined to have been involved in a transaction that related to 1HQ3".

"according to the investigation, ulbricht became aware of individual x's online identity and threatened individual x for the return of the cryptocurrency to ulbricht".

......which makes me wonder if he leaked his identity in other ways.

[paramind22]

The American intelligence services noted that this is the largest amount for the entire existence of cryptocurrencies that they have confiscated. And now the most interesting thing begins - who exactly will become the owner of all this fabulous wealth ??

 I wonder how they can afford to pay people social security checks every month.  Hopefully, it will go into that.