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69,000 bitcoins that moved on Tuesday likely tied to Silk Road dark market: Elliptic

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The Block previously reported that 69,369 bitcoins — nearly $1 billion in value — moved from wallet address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx, the fourth-largest bitcoin wallet. 

Now, blockchain analytics firm Elliptic is saying the moved bitcoin could be connected to the Silk Road darknet marketplace, which launched in 2011 and was shut down in October 2013. Site founder Ross Ulbricht was arrested at the time of the shutdown and was later sentenced to life in prison. 

"The Silk Road attracted close to 150,000 buyers and 4,000 vendors, and facilitated total sales of $183 million. The FBI seized approximately 174,000 bitcoins from Ulbricht, worth around $105 million by that time due to bitcoin’s growing value. These bitcoins were later sold at auction by the US government," Elliptic wrote in the post.

Source: Elliptic

Another potential reason for the move could be that hackers seized control of the wallet, or the original wallet owner fears the threat of a hack.

“Either the password on the file has been cracked and the bitcoins taken, or the person controlling the funds might be worried about the possibility of it being cracked, and has therefore moved the funds to another wallet,” Robinson told The Block. 

As he expanded on in a blog post:

"The movement of these bitcoins today, now worth around $955 million, may represent Ulbricht or a Silk Road vendor moving their funds. However it seems unlikely that Ulbricht would be able to conduct a bitcoin transaction from prison. Alternatively, the encrypted wallet file may have been real, and the password has now been cracked - allowing the bitcoins to be moved."

Whatever reasons spur the movement of bitcoin, Robinson writes in a blog post, exchanges should be on the lookout for bitcoin deposits that can be traced back to the address.

 

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