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DOJ ‘Overlooked’ USD 500k in Forked Crypto in Bitcoin Bust

Tim Alper
Last updated: | 1 min read

American law enforcers may have made a slip-up that has left thousands of dollars’ worth of forked cryptoassets sitting around in wallets – potentially still within the grasp of at-large darknet criminals.

Source: Adobe/mehaniq41

Per a blog post from a blockchain analytics firm and anti-money laundering solutions provider named Coinfirm, the case is linked to the seizure earlier this month of funds accrued by a so-called Individual X.

As reported, the American Department of Justice (DOJ) identified Individual X as a hacker who managed to comb old bitcoin accounts associated with the darknet portal Silk Road, picking up a cool USD 1bn worth of bitcoin (BTC) in the process.

Silk Road was taken down in 2013, but the DOJ’s investigation led it to a single BTC account and “thousands of bitcoins.”

But according to Coinfirm, more than USD 500,000 (09:29 UTC) worth of cryptoassets still in criminals’ wallets.

This appears to be due to the fact that the DOJ has forgotten to take into account the fact that cryptoassets can fork, often creating new tokens that are automatically stored on wallets associated with the original token wallet – and accessible via the same private keys.

The firm made a list of some of the forked funds that the DOJ had “seemingly overlooked” in its November 3 bust, claiming that these are still “left in the hands of whoever has access to the private keys of the main wallet.”

  • 693,701 Bitcoin Diamond (ranked 104th by market capitalization) currently worth about USD 436,112
  • 69,370 Super Bitcoin (ranked 1,847th), currently worth about USD 65,000
  • 69,370 Bitcoin Private (ranked 791st), currently worth about USD 11,600

Coinfirm added that “whoever has access to the private keys of the main wallet, would still have access to these funds,” and claimed it had also unearthed evidence of “dozens of cases in which law enforcement authorities may have unknowingly left substantial funds accessible to suspects instead of properly accounting for and seizing those assets.”
Learn more: US Government Is Now Top Bitcoin Whale. What Could Happen Next?