[2020-11-06] US authorities seize $1 billion in bitcoins

[Best_Change]

US authorities seize $1 billion in bitcoins

The US Department of Justice said it had seized 69,370 BTC linked to the Silk Road darknet market on Tuesday.

In addition, government officials received equivalent amounts in bitcoin forks: Bitcoin Cash, Bitcoin Gold and Bitcoin SV. The department emphasized that this is the largest seizure of cryptocurrency in the United States of all time.

It follows from the case documents that in April 2013, a hacker under the nickname Individual X hacked into Silk Road and stole the indicated amount. On Tuesday, November 3, he agreed to hand over the cryptocurrency to the authorities. Silk Road existed from 2011 until in 2013 law enforcement officers arrested the owner of the platform and sentenced him to life imprisonment.

Source: https://www.coindesk.com/u-s-seized-more-than-1b-in-silk-road-linked-bitcoin-seeks-forfeiture-bloomberg

Read more news in our Medium channel: https://medium.com/@BestChange

[Fatunad]

Thing comes up to my mind on now the government do have held those bitcoins neither those would be kept but for sure they would really have that in mind that they will sell off. 

Im just wondering on what are the things that had been done on why that hacker did really agree on making out such transfer rather than keeping those coins or keys for himself.

Unless if he had been offered with some sweet deal for him to sing out those keys. Do this news can possibly give out some positive or negative effect to the entire market?

[figmentofmyass]

• Prosecutors say an unnamed hacker stole the trove from Silk Road and moved them to a wallet where they sat from April 2013 until the Tuesday seizure.
• The individual consented to the government seizure on Tuesday.
• The news comes days after blockchain intelligence firm Elliptic reported that a wallet possibly belonging to the Silk Road marketplace moved almost $1 billion worth of bitcoin (BTC, +0.07%) earlier this week.
• This was the first transaction from the address since 2015, when it transferred 101 BTC to BTC-e – a now-shuttered cryptocurrency exchange allegedly favored by money launderers, Elliptic said.

i wonder what the exact course of events was, or more specifically, where the hacker made his mistake. this makes it sound like he moved the coins in a way (or to an exchange?) where they were identified by the USA government. then they gave up access to the coins to police as part of a plea agreement, or in an attempt to gain leniency.

if this is anything like the first silk road seizure, those coins will start being auctioned off by the US marshals in.....6-7 months? i wonder if it'll have much effect on supply, in the sense that OTC buyers accumulating via those auctions won't be accumulating from other OTC or exchange sources.

[bbc.reporter]

@figmentofmyass. It might also be the difficulty in hiding and laundering that much bitcoins hehe. I speculate the hacker might have thought that it would be safer to give up access, make a deal with the government and enjoy some of those coins.

I speculate all individual whales wallets in bitcoin's richlist might be monitored by the government also. The tax agencies are waiting hehehe.

[figmentofmyass]

@figmentofmyass. It might also be the difficulty in hiding and laundering that much bitcoins hehe. I speculate the hacker might have thought that it would be safer to give up access, make a deal with the government and enjoy some of those coins.

no way. at the very end of the filing, you can see the government justifies seizing all the coins on 2 grounds: 1. they are proceeds of an illegal hack, and 2. they were commingled with funds tied to narcotics trafficking. in their eyes, they don't need to let the hacker enjoy any of the coins. if he doesn't cooperate, they can throw the book at him and get him thrown in prison for most of his life.

I speculate all individual whales wallets in bitcoin's richlist might be monitored by the government also. The tax agencies are waiting hehehe.

the IRS was definitely central to this investigation.

in this case, we know where the government began their analysis. this is from the filing:

In 2020, law enforcement officers used a third party bitcoin attribution company to analyze Bitcoin transactions executed by Silk Road. From this review they observed 54 transactions that were sent from Bitcoin addresses controlled by Silk Road, to two Bitcoin addresses...

These 54 transactions were not noted in the Silk Road database as a vendor withdrawal or a Silk Road employee withdrawal and therefore appear to represent Bitcoin that was stolen from Silk Road.

they mention a transaction that deposited some of the stolen funds to BTC-E in 2015, which is probably how they identified the hacker. they also mention being aware of the hacker's online identity, so it's possible he was identified that way.

[Harlot]

Maybe these is just a made-up story by the government to cover up this "unnamed hacker" that is actually working for them. One of the reasons why I think its this way is if he isn't really identified by the authorities then there is no reason for the hacker to give up the money he had obtained from the hack, basically he can run off from them without getting caught. Something in the story is not right or at least not complete there might be a hacker or just someone working undercover for the government.

[bbc.reporter]

@figmentofmyass. Hehehe poor fellow. He should appreciate his freedom, however.

This should be be very concerning for the whales in the richlist if IRS is central to this investigation. What would happen to a 2011 whale's billions if he was identified? Taxed 30%?

@Harlot. I like the skeptical you hehehehe.

[jseverson]

• Prosecutors say an unnamed hacker stole the trove from Silk Road and moved them to a wallet where they sat from April 2013 until the Tuesday seizure.
• The individual consented to the government seizure on Tuesday.
• The news comes days after blockchain intelligence firm Elliptic reported that a wallet possibly belonging to the Silk Road marketplace moved almost $1 billion worth of bitcoin (BTC, +0.07%) earlier this week.
• This was the first transaction from the address since 2015, when it transferred 101 BTC to BTC-e – a now-shuttered cryptocurrency exchange allegedly favored by money launderers, Elliptic said.

i wonder what the exact course of events was, or more specifically, where the hacker made his mistake. this makes it sound like he moved the coins in a way (or to an exchange?) where they were identified by the USA government. then they gave up access to the coins to police as part of a plea agreement, or in an attempt to gain leniency.

if this is anything like the first silk road seizure, those coins will start being auctioned off by the US marshals in.....6-7 months? i wonder if it'll have much effect on supply, in the sense that OTC buyers accumulating via those auctions won't be accumulating from other OTC or exchange sources.

The actual court document seems to provide a rough outline of events. Some snippets:

15.In 2020,  law enforcement officers used  a  third  party  bitcoin   attribution   company  to  analyze Bitcoin  transactions  executed  by  Silk  Road.    From  this  review  they observed  54  transactions  that  were sent from Bitcoin   addresses  controlled   by  Silk   Road,  to  two  Bitcoin  addresses:1BADznNF3W1gi47R 65MQs754KB7zTaGuYZ  and 1BBqjKsYuLEUE9Y5WzdbzCtY zC iQgHqtP N totaling  70,411.46  BTC (valued  at approximately  $354,000  at the time of transfer).  

16.The individual  amounts that were transferred were mainly  round Bitcoin  amounts  and  close together in  time.  For example,  10 of the transfers occurred at approximately  3:59  a.m. and each transfer was for exactly 2,500 Bitc oin.     This  pattern  of  withdrawals  and the amount  that was withdrawn was not  typical  for a Silk  Road  user.  Specifically, a review  of  other  withdrawals  from  Silk   Road  revealed  Bitcoin   amounts  that  were  mostly  less  than  100  Bitc oin.  These 54 transactions  were not noted in  the   Silk  Road database as a vendor  withdrawal  or a Silk  Road employee  withdrawal  and therefore appear to represent Bitcoin  that was stolen  from Silk  Road.

17.On approximately  April  9, 2013,  the Bitcoin  addresses that received the 70,411.46 B itc oin  from Silk  Road sent 69,471.082201  (approximately  $14  million   at the time  of transfer) to 1HQ3Go3ggs8pFnXuHVHRytP Cq5f GG8H bhx  (hereafter “1HQ3”).

[...]

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

22.According  to  an investigation  conducted by the Criminal  Investigation  Division  of  the  Internal Revenue Service and the U.S. Attorney’s Office for the Northern District  of California, Individua l  X  was the individua l  who moved  the cryptocurrency from Silk  Road.  According  to the investigation, Individua l  X  was able  to hack into  Silk  Road  and gain  unauthorized  and illegal  access to Silk  Road  and thereby steal the illicit  cryptocurrency  from Silk  Road and move it  into  wallets  that  Individua l   X  controlled.     According  to the investigation, Ulbricht  became aware of Individual  X’s online identity  and threatened Individua l  X for return of the cryptocurrency  to Ulbricht.   Individua l  X did  not  return  the  cryptocurrency  but  kept  it  and  did  not  spend  it.  

23.On  November  3,  2020,  Individual   X   signed  a Consent and Agreement to Forfeiture  with the U.S. Attorney’s Office, Northern Dis tr ict  of California.   In that  agreement,  Individual   X,  consented  to the forfeiture  of  the  Defendant P roperty to the United States government.

One thing of note is that "Individual X" sent money from the hack to BTC-e in 2015, which could have led to his identity being known to the authorities. That may ultimately have been inconsequential though, since Ross Ulbricht himself somehow knew of their identity as well.

[suzanne5223]

Thing comes up to my mind on now the government do have held those bitcoins neither those would be kept but for sure they would really have that in mind that they will sell off. 

It reasonable that they will sell the BTC the $1billion worth of BTC they have in possession now that some fund is needed to help their economic but if the US goverrments decide to sell off I dont think that shoukd by chance bother us now that the mainstream of Bitcoin is increasing.
 

Im just wondering on what are the things that had been done on why that hacker did really agree on making out such transfer rather than keeping those coins or keys for himself.
Unless if he had been offered with some sweet deal for him to sing out those keys. Do this news can possibly give out some positive or negative effect to the entire market?

They will never unleash what they offer to the hacker but the US government are good in making bargain and the news will affect the market negatively but i expect fast come back.

[bryant.coleman]

Entire story sounds fishy to me. First of all, I don't think that Ross Ulbricht was the sole administrator of Silk Road. In all probability, more people were involved. I would assume that the other administrators have traded their Bitcoins for freedom. I am sure that there is no hacker named Individual X, and this identity was created by the FBI agents.

[InvoKing]

Entire story sounds fishy to me. First of all, I don't think that Ross Ulbricht was the sole administrator of Silk Road. In all probability, more people were involved. I would assume that the other administrators have traded their Bitcoins for freedom. I am sure that there is no hacker named Individual X, and this identity was created by the FBI agents.

NSA joined the chat.
I agree, individual X is probably linked in a way or another to one of these agencies. The only thing that i am worried of is when dumping all that money 

[BayAreaCoins]

I would imagine/bet these are Mongooses Bitcoins that he got from proving himself as worth a shit.

You don't just make suggestions and get listened to in those "industries"... I think you do something that kinda makes a name for yourself.

I bet the nasty secret was Mongoose lifted some coins from Ross and helped Ross patch the problem.  That's how they got acquainted probably. (I do not know, just guessing)

Now Mongoose is negotiating and it looks like negotiations are going well because it's "hacker x" and not Roger Clark.  

[bbc.reporter]

Entire story sounds fishy to me. First of all, I don't think that Ross Ulbricht was the sole administrator of Silk Road. In all probability, more people were involved. I would assume that the other administrators have traded their Bitcoins for freedom. I am sure that there is no hacker named Individual X, and this identity was created by the FBI agents.

NSA joined the chat.
I agree, individual X is probably linked in a way or another to one of these agencies. The only thing that i am worried of is when dumping all that money 

There will be an auction for those coins.

I am not certain, however, it might be illegal for the government as a whole or any government agencies within it to buy and sell equities, commodities, cryptocoins and other speculative investments.

[Karartma1]

Sci-fi mode ON
Imagine the possibility to take part in the auction as a community: we could reclaim ownership of those coins and avoid they will enter any institutional hands. Then those funds will go through many anonymity cycles via any privacy tool we prefer and all who contributed will get their share.
At the end of the process, we could use some of those funds to support Ross Ulbricht's freedom and that would be a great achievement.
Sci-fi Mode OFF

just dreaming