“Silk Road was the most notorious online criminal marketplace of its day,” US Attorney David Anderson of the Northern District of California said in a news release Thursday.
“The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go?” Anderson added.
Silk Road is a now-shuttered online black market best known for selling illegal drugs. The platform allowed people to buy and sell drugs and other illegal items using bitcoins.
When Ulbricht was arrested in October 2013, federal authorities seized about 175,000 bitcoins. However, authorities stated that the website had collected more than 600,000 bitcoins through sale commissions. The latest seizure accounts for some of those bitcoins, the DoJ explains.
According to court documents, the DoJ seized around 70,000 bitcoins, worth about $1 billion, with the help of an unidentified hacker who is only referred to as “Individual X” in the documents.
The bitcoins had been stolen from Ulbricht in 2012 and 2013 by the hacker, who liquidated some of them, the Wall Street Journal explained. However, many of the bitcoins were left in a digital account called a wallet.
The coins were also seized after blockchain analysts at London-based firm Elliptic noticed the movement of more than 69,000 bitcoins in a transaction from a digital wallet linked to Ulbricht, the Washington Examiner explained.
Tom Robinson, co-founder at Elliptic, said the movement of bitcoins “may represent Ulbricht or a Silk Road vendor moving their funds” but that it “seems unlikely that Ulbricht would be able to conduct a bitcoin transaction from prison,” CNBC reported.
The bitcoins seized this week are expected to be far more valuable than they would have been in 2013, when bitcoins were trading at around $130 each. Currently, the cryptocurrency’s price is around $15,000.
The seizure was the result of an investigation spearheaded earlier this year by the DoJ, the Internal Revenue Service’s criminal investigations unit and Chainalysis and Excygent, two firms that make bitcoin-analytics software.
The US government has yet to say what it will do with the seized bitcoins. In the past, cryptocurrency seized by authorities has been auctioned off.