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Almost $1B In Bitcoin Moved Out Of Account Tied To Silk Road

A huge bitcoin amount — nearly $1 billion — has been moved out of a bitcoin address that may have ties to the Silk Road black market, according to a blog post from Elliptic. The London-based company provides blockchain analysis.

As the post notes, Ross Ulbricht received a double life sentence for his role in creating and operating the Silk Road online marketplace.

“The Silk Road was groundbreaking in that it combined two privacy-preserving technologies — bitcoin and Tor — to enable the seemingly anonymous trade of illicit goods and services,” wrote Dr. Tom Robinson, Elliptic co-founder and chief scientist.

He said the bitcoin address that was accessed was “also notable because an encrypted file has been circulating on hacker forums for the past year, which purportedly contains keys required to seize the bitcoins in this address. If genuine, cracking the password on this file would allow these bitcoins to be moved.”

Robinson added that “through blockchain analysis, we can determine that these funds likely originated from the Silk Road.” He said the bitcoins “left the Silk Road’s wallet” in 2012 before being put into the bitcoin address in question the next year.

“The movement of these bitcoins today (Nov. 4), now worth around $955 million, may represent Ulbricht or a Silk Road vendor moving their funds,” he continued. “However, it seems unlikely that Ulbricht would be able to conduct a bitcoin transaction from prison. Alternatively, the encrypted wallet file may have been real, and the password has now been cracked — allowing the bitcoins to be moved.”

“There has always been the suspicion that proceeds of the Silk Road may remain in circulation,” noted Robinson, adding that “total commissions earned by the Silk Road” are believed to have been some $6 billion in today’s market.

The U.S. government is taking note of bitcoin’s allure to scammers. FBI Director Christopher Wray said his agents have observed the dangers of cryptocurrency’s criminal usage firsthand. “We see criminals using cryptocurrency to try to prevent us from ‘following the money’ across a wide range of investigations, as well as to trade in illicit goods like criminal tools on the dark web,” Wray said.

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