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The Silk Road made a small fortune during its two and a half years as the web’s biggest anonymous black market for illegal drugs,... FBI Seized $28.5 Million in Bitcoins From Silk Road Owner Ross Ulbricht

The Silk Road made a small fortune during its two and a half years as the web’s biggest anonymous black market for illegal drugs, but at least a $28.5 million chunk of that money now belongs to the FBI.

The bureau has located and seized a collection of 144,000 Bitcoins, the largest seizure of that cryptocurrency ever made.  The value is worth close to $28.5 million at current exchange rates. It is believed the stash belonged to Ross Ulbricht, the man who allegedly created and managed the Silk Road.  The popular anonymous drug-selling site was taken offline by the Department of Justice after Ulbricht was arrested earlier this month and charged with engaging in a drug trafficking and money laundering conspiracy, charges of computer hacking and attempted murder-for-hire were also mentioned.

Bitcoin Seizure

The FBI official wouldn’t say how the government agency had determined that the Bitcoin “wallet” (a collection of Bitcoins at a single address in the Bitcoin network) belonged to Ulbricht, but, they did say that it was sure they belonged to him. “This is his wallet,” said an FBI official. “We seized this from DPR,” they added, referring to the pseudonym “the Dread Pirate Roberts,” which prosecutors say Ulbricht allegedly used whilst operating the Silk Road, (the Dread Pirate Roberts is a mysterious character from William Goldman’s 1973 novel, The Princess Bride).

When the Silk Road was taken down on October 1st 2013, the FBI seized nearly 30,000 bitcoins, which are worth close to $6 million based on the recent surge in the value of Bitcoin’s against the dollar. That was the first time the FBI had ever seized any amount of the cryptocurrency.  This more recent seizure represents the biggest Bitcoin takeover by a law enforcement department, ever. “This is unprecedented,” said the official. “Even if this were a regular drug case, it would be huge.”  In total, the FBI has now seized close to $34.5 million from the Silk Road. An FBI spokesperson previously told Forbes that it will likely exchange the seized bitcoins for dollars after Ulbricht’s trial or settlement concludes.  In fact 174,000 bitcoins that the FBI controls now account for about 3.15% of all Bitcoins in current circulation.

In its criminal file against Ulbricht, the Department of Justice has claimed that the Silk Road had earned $80 million in commissions during its time in operation.  It is unlikely, however, that the site’s administrators pocketed anywhere near that much in actual profit.

[Image via wired]