What just happened? Earlier this week, a massive stash of Bitcoins moved from one digital wallet to another. It was the first time the account had been touched since 2015 and given the amount of money involved, people took notice. Who was behind the transfer of approximately 69,370 Bitcoins (just over $1 billion), which were reportedly linked to online black market Silk Road? Was it someone tied to the former operation, or perhaps alleged mastermind Ross Ulbricht himself?
As it turns out, it was the US government.
The Department of Justice on Thursday said it took possession of the digital assets on November 3. They were allegedly connected to an unnamed person identified as Individual X, who reportedly stole the funds from Silk Road in 2012 or 2013.
The civil complaint merely alleges that certain property is subject to forfeiture. The United States must prove, by a standard of preponderance of the evidence, that the items are subject to forfeiture. If the United States prevails, the court will order all interests of any potential claimant forfeited.
The identity of Individual X is known to the government and is the individual that moved the coins from Silk Road years ago but wasn't revealed in court documents.
The FBI in late 2013 seized the Silk Market, one of the largest online outlets for illegal drugs and services ever to exist. The site’s alleged mastermind, Ross Ulbricht, was arrested and later found guilty of all charges. He is serving a double life sentence in prison without the possibility of parole.
The court documents claim Ulbricht became aware of Individual X's online identity and "threatened Individual X for return of the cryptocurrency." The user did not return the coins, instead, keeping them but not spending them.
On November 3, 2020, 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.