Nearly USD 1B In Bitcoin, Possibly From Silk Road, Moved
Nearly USD 1 billion in bitcoin (BTC) believed to be from the infamous Silk Road darknet market moved today, for the first time in five years, claimed blockchain tracker Elliptic.
According to their report, BTC 69,369 - currently (8:16 UTC) worth USD 945.4m - has been moved out of the bitcoin address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx, which had had the fourth highest balance of any bitcoin address until that point.
The tracker found that "through blockchain analysis, we can determine that these funds likely originated from the Silk Road." Co-founder of Elliptic, Tom Robinson, told Bloomberg he's "about 60% confident that these funds are from the Silk Road at the moment — I’m not certain about it."
In 2012, this BTC was moved out of the Silk Road's wallet, at the time worth USD 350,000, and then moved to the above-stated address in 2013 after laying dormant for a year. Since then, said the report, the address went dormant again, save for BTC 101 transfer in 2015 to BTC-e, a crypto exchange for which the report claims was "favored by money launderers" then "taken down by US law enforcement in 2017."
However, the team has warned that whoever moved the funds, and for whatever reason, "the funds are now on the move, and whoever now controls the bitcoins may want to cash them out," urging exchanges to be on a lookout.
And speaking of which, Robinson told Bloomberg that it's not clear if these BTC were moved by the founder, a vendor, or law enforcement. The report gave two possible explanations among others:
- Silk Road founder Ross Ulbricht or a Silk Road vendor could be moving their funds, though it's not very likely that Ulbricht is able to transfer bitcoin from prison. He got a double life sentence for his part in founding and operating the darknet marketplace.
- There is an encrypted file circulated on hacker forums for the past year, claiming to hold the cryptographic keys to the above-written address. This means that whoever would crack the password on the file could take the bitcoin within it. Therefore, another possibility is that the encrypted wallet file has been real, the password has been cracked, and the bitcoins were moved.
Robinson added in a tweet that it's possible that the owner of the wallet moved the BTC to a new wallet to prevent it from being taken by whoever cracks the password.
He also appears to be more convinced that the funds are the founder's than the report seems to suggest. "I'm going to stick my neck out and suggest that there is a fair chance that these are Ross Ulbricht's bitcoins," Robinson tweeted.
The Silk Road was well-known for its privacy-keeping efforts, as it combined bitcoin with open-source software for enabling anonymous communication Tor. This effort, wrote Elliptic, enabled "the seemingly anonymous trade of illicit goods and services." The market had some 4,000 vendors and 15,000 buyers, and had facilitated total sales of USD 183m.
The report added that it's believed that the Silk Road earned a total commission of around BTC 614,000 (USD 8.4bn). The FBI seized, and the US government later sold, some BTC 174,000 from Ulbricht, at the time worth c. USD 105m, and USD 2.37bn today. So taking those BTC out of the picture, as well as those moved today, then there is still BTC 370,631, worth USD 5bn, sleeping somewhere.
Bitcoin is currently trading at USD 13,628. It went up less than 1% in a day and remained mostly unchanged in the past week.