The United States Department of Justice confiscated around $1 billion worth of bitcoins on Tuesday. Today it is suing for forfeiture of the BTC that federal personnel seized. The coins allegedly belong to the now-defunct darknet marketplace Silk Road.
US DOJ Wants The Forfeiture Of Bitcoin Worth $1 Billion
As per Bloomberg’s latest report, the US Justice Department wants immediate forfeiture of bitcoins worth $1 billion that it seized on Tuesday. The BTC stash belongs to Silk Road operators. And its confiscation is one of the largest to date for the country, which has been quite a lot in the news for busting digital currency-related crimes.
The bitcoins made up the 4th largest BTC wallet in the world. When coins started moving out of the stash, blockchain analysis firm Elliptic flagged the transaction with Silk Road roots. US federal authorities lost no time in seizing the funds. Through the confiscation, the authorities have actually moved a significant share of bitcoins out of circulation.
Further Details And Implications
How It Happened
According to Bloomberg, this is the reason behind BTC’s massive pump that took it above the $15,000 price mark. The mainstream media outlet reports that law enforcement officials have auctioned seized cryptocurrencies, but much later, after seizing them.
The official complaint document reveals that along with actual bitcoins, the top cryptocurrency’s prominent forks – Bitcoin Gold (BTG), Bitcoin Cash (BCH), and Bitcoin SV (BSV) were also present in equal quantities as their parent coins.
The Defendant Property is approximately 69,370.22491543 Bitcoin (BTC), 69,370.10730857 Bitcoin Gold (BTG), 69,370.10710518 Bitcoin SV (BSV), and 69,370.12818037 Bitcoin Cash (BCH), obtained from 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbh on or about November 3, 2020.
Elliptic’s chief scientist claims that an inside man affiliated to Silk Road initiated the transaction, with the added possibility of Ulbricht himself being involved in the bitcoin transaction from the fourth largest wallet.
But the official ‘complaint for forfeiture’ says otherwise. The document designates the person as ‘Individual X’ and claims that the transaction generator’s ‘identity is known to the government.’
According to the investigation, Individual X was able to hack into Silk Road and gain unauthorized and illegal access to Silk Road and thereby steal the illicit cryptocurrency from Silk Road and move it into wallets that Individual X controlled.
The complaint further claims that Ulbricht came to know who Individual X is and threatened the individual to return the stolen bitcoin funds. But much to the former’s chagrin, the latter didn’t hand over the BTC. Moreover,
…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.
What Happens Now
The United States has ordered a complete forfeiture of all the seized bitcoin funds. Involved parties, Ross Ulbricht and other Silk Road operators, will get a chance to defend his position. Also, he may plead to drop the forfeiture order altogether.