The U.S. Department of Justice (DOJ) shut down the infamous Silk Road darknet marketplace back in 2013, yet the saga — which has been intricately linked with bitcoin (BTC) since it was the platform’s currency of choice — continues to thicken.
That’s because earlier this week, the fourth-largest bitcoin wallet moved 69,369 bitcoins — roughly $1 billion USD at the time — and sent Bitcoin blockchain observers into a frenzy.
Speculation mounted as to what happened, and some folks quickly honed in on the possibility that the address responsible — 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx — was in some way linked to the Silk Road.
That speculation was confirmed on Thursday, November 5th, when the DOJ revealed that it had seized the nearly 70,000 BTC from an “Individual X” who had stolen the crypto through a hack of the Silk Road circa 2012 or 2013.
Finding Individual X
Per the DOJ’s November 5th court filing, it’s clear that America’s law enforcement officials were able to track down the “1HQ3″ address’s owner by employing the services of renowned blockchain analytics firm Chainalysis.
Through Chainalysis, these officials were able to analyze Bitcoin transactions executed by Silk Road.” At this point, they discerned 54 notable transactions to two addresses, with most of the funds therein ending up in the “1HQ3” address in April 2013. Analysts determined the problematic nature of the address due to the peculiar way that funds flowed to it:
“For example, 10 of the transfers occurred at approximately 3:59 a.m. and each transfer was for exactly 2,500 Bitcoin. This pattern of withdrawals and the amount that was withdrawn was not typical for a Silk Road user … These 54 transactions were not noted in the Silk Road database as a vendor withdrawal or a Silk Road employee withdrawal and therefore appear to represent Bitcoin that was stolen from Silk Road.”
So with investigators concluding a hacker afoot, the hunt was now on. And the predators were…