DOJ Hasn't Actually Found Silk Road Founder's Bitcoin Yet

from the they're-still-out-there dept

With the DOJ tracking down and arresting the alleged founder/owner of Silk Road, Ross Ulbricht, it was noted that it had also seized 26,000 or so Bitcoins. However, in the criminal complaint against Ulbricht, it suggested that his commissions were in the range of $80 million -- or about 600,000 Bitcoins. You might notice the disconnect between the 26,000 Bitcoins seized and the supposed 600,000 Ulbright made. It now comes out that those 26,000 Bitcoins aren't even Ulbricht's. Instead, they're actually from Silk Road's users. In other words, these were Bitcoins stored with user accounts on Silk Road. Ulbricht's actual wallet is separate from that, and was apparently encrypted, so it would appear that the FBI does not have them, nor does it have any way of getting at them just yet. And given that some courts have argued you can't be forced to give up your encryption, as it's a 5th Amendment violation, those Bitcoins could remain hidden -- though, I could see the court ordering him to pay the dollar equivalent in restitution (though still not sure that would force him to decrypt the Bitcoins).

The other amusing bit in all of this is that the FBI's Bitcoin wallet has been identified and renamed as "Silkroad Seized Coins" allowing users to send the FBI tiny amounts of Bitcoin with public messages attached, some of which are fairly amusing -- and many of which are critical of the government and the takedown of Silk Road. Personally, I like the one that reads: "This page shows how Bitcoin is more transparent than the US government."

Kash Hill, over at Forbes (the link above) who highlighted this story, also asked the FBI about what they're going to do with all that Bitcoin. Apparently, the plan is to hold onto it for now, and then "liquidate it" after any trial is concluded, though the FBI's spokesperson admits that "this is kind of new to us." Does that mean that someday soon folks will be able to buy some Bitcoin at a government auction?
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Filed Under: bitcoin, bitcoin wallet, doj, fbi, ross ulbricht
Companies: silk road


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  1. identicon
    Anonymous Coward, 5 Oct 2013 @ 8:29am

    Buried.

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