American authorities finally grabbed $1 billion in bitcoins which belonged to the notorious dark web organization known as Silk Road. The cache amounted to almost 70,000 coins.
The Silk Road was known mainly for providing a market place for the sale of illegal drugs on the dark web. The dark web is called that because it is a part of the Internet which remains anonymous so people can engage in illegal activities without worrying that governments can track their locations and follow their transactions.
These operations used – or abused – free and open-source software for enabling anonymous communication called Tor. In short, such software relies on hidden servers which stay off of the regular Internet servers and service providers.
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American Ross Ulbricht started Silk Road in 2011. He was arrested in 2013 and convicted on charges of money laundering, computer hacking, conspiracy to traffic fraudulent identity documents, and conspiracy to traffic narcotics by means of the internet. He is currently serving a double life sentence.
In the end, people involved in the Silk Road were caught through the use of undercover agents like those in stings that uncover online child predators.
“Silk Road was the most notorious online criminal marketplace of its day. The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go? Today’s forfeiture complaint answers this open question at least in part,” said U.S. Attorney David Anderson.
So what took so long? Well when Dark Web was brought down in 2013 someone known only as “Individual X” was able to steal all of those bit coins. While his identity was not revealed, US authorities said that he agreed to turn over the bit coins.
The American Justice Department filed a motion to claim the funds.
“Criminal proceeds should not remain in the hands of the thieves. Through CI’s expertise in following the money, we were able to track down the illicit funds,” said IRS-CI (Internal Revenue Service Criminal Investigation) Special Agent in Charge Kelly R. Jackson. “The Washington DC Cyber Crimes Unit is uniquely specialized in tracing virtual currency transactions and we will continue to hone our skills to combat illegal activity.”
The government complaint states that Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs as well as other unlawful goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars derived from these unlawful transactions.
At the time it was taken down in 2013, Silk Road had nearly 13,000 listings for controlled substances and many more listings offering illegal services, such as computer hacking and murder for hire, which generated sales revenue totaling over 9.5 million Bitcoins and commissions from these sales totaling over 600,000 bitcoins.
The complaint further alleges that Silk Road used a so-called “tumbler” to process bitcoin transactions in a manner designed to frustrate the tracking of individual transactions through the cryptocurrency Blockchain.