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- The U.S. government has seized more than 69,000 Bitcoins and similar amounts in Bitcoin Cash, Bitcoin Gold, and Bitcoin SV.
- Funds were confiscated from darknet market operators of the Silk Road which was closed in 2013 by U.S. authorities.
Earlier this week, the crypto community speculated on a Bitcoin transaction that emptied the fourth-largest BTC address. A Bloomberg report now shows that none of the possibilities raised by the community was correct. The 69,369 BTC transaction was part of the seizure of funds from the darknet market operators of the Silk Road by U.S. authorities. In addition to the funds in BTC, the report indicates that the U.S. government seized 69,370 in Bitcoin Gold (BTG), Bitcoin SV, and Bitcoin Cash. The funds were obtained from the address on November 3.
Bitcoins from legendary Silk Road seized
Following the seizure of the funds, the authorities have filed a lawsuit to confiscate them. The lawsuit has been filed at the Northern District Court of California. According to the report, the funds were hacked in 2013 by a hacker identified only as “Individual X”, in the same year US authorities closed down Silk Road’s operations.
The black market generated about $1.2 billion in revenue over a two-year period. There is speculation that Individual X is former Silk Road operator, Ross William Ulbricht, sentenced in 2015 by a U.S. court to a life sentence.
However, there is no consensus on Ulbricht’s involvement in the investigation. Bloomberg claims that Individual X was located from an investigation by the Internal Revenue Service’s Criminal Investigation Division. Furthermore, the research firm Chainalysis is supposed to be the primary partner of the authorities in tracing the funds. The investigation identified 54 Bitcoin addresses that were used to reach the suspect:
Individual X signed a Consent and Agreement to Forfeiture with the U.S. Attorney’s Office, Northern District of California. In that agreement, Individual X, consented to the forfeiture of the Defendant Property to the United States government.
Bloomberg’s report links the latest Bitcoin rally to its annual high. However, the reasoning does not seem entirely plausible, as the funds still need to be auctioned off to have an impact on the market. eToro US CEO, Guy Hirsch, however, believes that this rally has the potential to continue:
For starters, there are solid macro fundamentals behind this run, including continued uncertainty around the U.S. elections and surprising weakness in the job market as the Covid pandemic rages on (…) almost feels like Bitcoin’s perfect storm.
Messari CEO Ryan Selkis stated the announcement shows how the Bitcoin market has matured. At the time of publication, the cryptocurrency still shows significant gains and stands at $15,478. Moreover, Selkis added that the report is destroying the “meaningless” narrative that Bitcoin is a currency “that can’t be traced” and is only used for illicit activities. He also speculated that Square, Fidelity or even PayPal could be interested in auctioning on the coins:
(…) these auctions will be epic institutional onboarding opportunities. The winner of a direct purchase from the U.S. authorities, is essentially buying “virgin” coins. Square or Fidelity or PayPal or DCG, etc will be among the winners of this auction.
