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Research Claims 1 out of 40 Bitcoins Seized by Government at Some Point

According to research by The Block Crypto, 453,000 Bitcoins have been seized by various governments at some point in the past. This is 2.6% of the 17.366 million Bitcoins in circulation, approximately 1 out of 40.

Some 85.6% of these seized coins came from the Silk Road shutdown and a crackdown on a crime group in Bulgaria. It is important to note that the amount of seized Bitcoins at any given time is much less than the total, as since governments usually auction off the seized funds for cash.

Theoretically, Bitcoin cannot be seized if used properly, since Bitcoins are cryptographically secured with a private key. However, if not stored properly or if forceful persuasion tactics are used, private keys can end up being revealed.

The Silk Road is probably the most well-documented seizure. A total of 174,000 Bitcoins were seized from the Silk Road when Ross Ulbricht was arrested in October 2013, worth nearly USD 54 million at the time. All of these have been auctioned off.

In May 2017, the Southeast European Law Enforcement Center (SELEC) announced that it had seized 213,519 Bitcoins worth USD 500 million, and these are believed to be in the coffers of the Bulgarian state. There is some controversy over whether this happened, due to conflicting official statements released by the Bulgarian government.

Other seizures include 24,518 Bitcoins by Australia in May 2016 from a Silk Road merchant, 11,000 Bitcoins by Europol in July 2015, 6,060 Bitcoins by the United States in April 2014, 4,000 Bitcoins by the United States in June 2018, another 3,813 Bitcoins by the United States in January 2018, with many smaller ones.

The United States and Europe are responsible for practically all of the seized Bitcoins in the world, besides the one incident in Australia. Bulgaria officially claims to not have the stash of 200,000 seized Bitcoins and the United States in one estimate has no more than 10,000 seized Bitcoins after auctions.

 

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Silk Road Fallout Continues as Libertas Takes Prison Plea Deal for up to 20 Years

The fallout from the Silk Road, perhaps the most infamous darknet market in history, continues. Gary Davis, aka Libertas, who was a site administrator and moderator, has pleaded guilty to distributing massive amounts of narcotics. Sentencing is scheduled for 17 January 2019, and Libertas faces a maximum sentence of 20 years in prison.

US Attorney Geoffrey S Berman said: “Silk Road was a secret online marketplace for illegal drugs, hacking services, and a whole host of other criminal activity. As he admitted today, Gary Davis served as an administrator who helped run the Silk Road marketplace. Davis’s arrest, extradition from Ireland, and conviction should send a clear message: the purported anonymity of the dark web is not a protective shield from prosecution.”

Libertas’ duties included moderating forum posts, arbitrating trade disputes, and enforcing marketplace rules. Apparently, he was paid a weekly salary in excess of USD 1,000.

Silk Road operated from 2011-2013 and transacted BTC 9.52 million. Although darknet activity comprises only a minuscule fraction of Bitcoin volume in 2018, back when Silk Road rose to prominence, it has been speculated that a large amount of Bitcoin’s price rise and adoption was driven by illicit trading there. Indeed, the collapse of Bitcoin’s price in late 2013 coincided with the shutdown of Silk Road.

Roughly BTC 174,000 were seized during a sting operation and these were eventually auctioned off. The owner of Silk Road, Ross Ulbricht aka Dread Pirate Roberts, is serving a life sentence in prison after a lengthy and controversial court battle, with his only hope being a presidential pardon.

Due to the anonymous nature of Silk Road, which used Tor and Bitcoin to shield operator’s and user’s identities, it took years to find Libertas and extradite him to the United States. It is believed by enforcement that there were only three team members working for Ulbricht. The other team members have not been sentenced yet.

 

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Brian Krebs – Feds Arrest Silk Road Founder, Shutter Website

Brian Krebs – Feds Arrest Silk Road Founder, Shutter Website:

Security expert Brian Krebs (@BrianKrebs) was first with news that the FBI had taken over the Silk Road marketplace website and later that the site’s founder was arrested by U.S. authorities. Excerpts:

“Federal agents in San Francisco arrested the Silk Road’s alleged mastermind. Prosecutors say 29-year-old Ross William Ulbricht, a.k.a “Dread Pirate Roberts” (DPR), will be charged with a range of criminal violations, including conspiracy to commit drug trafficking, money laundering, computer hacking and murder for hire.”

“[The FBI’s big break came] on July 23, 2013, when investigators gained access to a Silk Road server and made a complete copy of the data on the machine.”

“Finally, DPR tripped himself up when he ordered some fake IDs from an international Silk Road vendor and had them sent to his residence. The fraudulent IDs were intercepted at the border by customs agents working with the U.S. Department of Homeland Security, which paid a visit to the address to which the documents were to be delivered.”

“Ulbrich graduated from the University of Texas with a bachelors degree in Physics in 2006, and that from 2006 to 2010, he attended graduate school at the University of Pennsylvania School of Materials Science and Engineering.”

“The government also announced today that pursuant to this action, it has also seized approximately 26,000 Bitcoins worth roughly $3.6 million, in what it’s calling the largest ever seizure of Bitcoins.”

 – http://bit.ly/17tnJgs
 – http://bitcointalk.org/index.php?topic=306331.0 (Further discussion on the topic)

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