A Look at ‘Individual X’ and the Seized Stash of Silk Road Bitcoins Worth $1 Billion
On November 3, 2020, the cryptocurrency community noticed that one of the largest addresses holding 69,369 bitcoins from the Silk Road were transferred. Following the onchain movement, the U.S. government revealed it had seized the coins from a person they dubbed “Individual X.” The following is an in-depth look at what we know about the […]
On November 3, 2020, the cryptocurrency community noticed that one of the largest addresses holding 69,369 bitcoins from the Silk Road were transferred. Following the onchain movement, the U.S. government revealed it had seized the coins from a person they dubbed “Individual X.” The following is an in-depth look at what we know about the Silk Road bitcoin address that was seized by U.S. law enforcement.
This week on election day in the U.S., American law enforcement officials seized 69,369 bitcoins worth over $1 billion today. The bitcoin address is a well known address and news.Bitcoin.com reported on the address on September 11, 2020. The reason why our newsdesk looked into the address is because hackers have been trying to sell an alleged encrypted wallet dat file during the last two years.
The bitcoin address called “1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx” or “1HQ3” for short, stemmed from the Silk Road according to blockchain analysis. According to onchain data, 1HQ3 got 69,471 BTC sent to the address on April 9, 2013. The funds came from the Silk Road (SR) marketplace and many of the funds stemmed from the SR bitcoin address “1BBq.”
Individual X managed to hack nearly $1 billion from the old Silk Road Bitcoin accounts.
Then the govt found Individual X and took the Bitcoin back, the DOJ announced today.
Between April 2013 and up until the day the address was seized, only one large transfer was sent. 101 BTC (over $1.5M) was sent to the now-defunct Btc-e exchange and after that, the wallet only contained 69,369 BTC.
Reports show that federal law enforcement seized the funds on November 3 and are seeking forfeiture with the courts. They describe obtaining the BTC from a “hacker” and prosecutors call the person “Individual X.” The person the government calls Individual X is still a mystery to this day and people are uncertain about this person’s true identity.
However, the court filing explains that the Internal Revenue Service (IRS) was involved with the procedure. Law enforcement officials also hired third party blockchain analysis investigators to analyze bitcoin transactions executed by Silk Road.
“From this review, they observed 54 transactions that were sent from bitcoin addresses controlled by Silk Road, two bitcoin addresses totaling 70,411.46 BTC (valued at approximately $354,000 at the time of transfer),” the court filing details.
“According to an investigation conducted by the Criminal Investigation Division of the Internal Revenue Service and the U.S. Attorney’s Office for the Northern District of California, Individual X was the individual who moved the cryptocurrency from Silk Road,” the attorney for United States David L. Anderson wrote.
Anderson further added:
On November 3, 2020, Individual X signed a Consent and Agreement to Forfeiture with the U.S. Attorney’s Office, Northern District of California. In that agreement, Individual X, consented to the forfeiture of the Defendant Property to the United States government. On November 3, 2020, the United States took custody of the Defendant Property from 1HQ3.
The filing also notes that after the 101 BTC was sent to BTC-e in 2015, two years later the alleged Russian operator, Alexander Vinnik, was indicted for running an unlicensed money transmitting business and for money laundering.
A number of bitcoiners assume this is how the prior owner of address 1HQ3 was caught, but there’s also the last two years of hackers attempting to crack the wallet. After the wallet saw the first transfer in 2013 with 69,471 BTC sent, a great number of cryptic messages have been sent to the address as well.
For instance, crypto advocates can leverage tools like note4ever.com, which encodes any message into a list of bitcoin addresses, so someone can broadcast it to an address of their preference. If someone was to inspect the transactions involved with address 1HQ3, then they would see a number of colorful messages.
Even after the federal agents seized the 69,369 bitcoin, messages with addresses like “1BitcoinForPresident42o7777DKkJij” and 1FreeRossF*ckCops77777777777W87XM can be seen on any blockchain explorer. A great number of messages were sent to 1HQ3 over the years and some people have definitely tried to communicate with the owner.
This leads to the massive amount of advertisements over the last two years that have claimed to sell an encrypted dat file belonging to the 1HQ3 bitcoin address. For example, Alon Gal, the Chief Technology Officer of cybercrime firm Hudson Rock tweeted about the address recently. Google also has approximately 16,700 links tethered to the address as well making it very popular.
Prior to the feds seizing the coins from the so-called Individual X, the wallet dat file was seen on marketplace websites like Satoshidisk.com, and All Private Keys. When news.Bitcoin.com reported on the attempted sales, one site was selling the file for 0.08929505 BTC or $1,050, which was the exchange rate at that time.
The 1HQ3 address may be a mystery today, but more clues are currently unraveling and may be published in the future. So far, this case has revealed where $1 billion worth of the old Silk Road bitcoins went, but 444,000 BTC is considered still missing from the marketplace’s coffers. Using today’s exchange rate, the missing 444k SR BTC is worth more than $6.8 billion today.
It will also be quite interesting to see whether or not the U.S. government decides to auction the 69k bitcoin stash, as they have done many times in the past.
What do you think about the bitcoin stash controlled by Individual X? Let us know what you think about this subject in the comments section below.
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New Crypto Rules in Thailand Could Require Traders to Show Income Before Opening Trading Accounts
Thailand seeks to introduce a new set of rules for retail crypto investors, specifically targeting those who want to open accounts. The Thai financial watchdog could require domestic crypto exchanges to ask traders for proof of income. Thai SEC Could Also Ask Crypto Investors to Prove Their Knowledge of the Market According to a Bloomberg […]
Thailand seeks to introduce a new set of rules for retail crypto investors, specifically targeting those who want to open accounts. The Thai financial watchdog could require domestic crypto exchanges to ask traders for proof of income.
Thai SEC Could Also Ask Crypto Investors to Prove Their Knowledge of the Market
According to a Bloomberg report, the Securities and Exchange Commission (SEC) of Thailand is likely preparing the ground to require investors to show their income or assets before opening accounts.
Ruenvadee Suwanmongkol, the secretary general of the country’s financial watchdog, pointed out that anyone who isn’t allowed to trade cryptocurrencies via their accounts can invest through licensed managers. She added:
It’s a big concern as most crypto investors on domestic exchanges are very young, such as students and teenagers. We realize those people love innovations and technology, but investments in these assets have enormous risk.
Moreover, the general secretary said that non-qualified crypto traders could invest via financial advisers only if they’re licensed by the SEC.
The watchdog is set to unveil its new rules on crypto trading over the week, ahead of a public hearing scheduled for March. Officials involved in the meetings are expected to evaluate recommendations from local exchanges and brokerages.
Although it’s not confirmed, the general secretary suggested that investors have to prove some knowledge of the market before being allowed to open crypto accounts for trading.
Six Licensed Crypto Exchanges Operating in Thailand so far
The rhetoric from the Thai SEC is now shifting to a cautious one towards the cryptocurrencies’ risks. However, they keep granting licenses to crypto businesses in the nation. So far, in terms of digital asset exchanges approved, there are only six operating legally in Thailand.
They are Bitkub, BX, Satang Pro, Huobi Thailand, ERX, and Zipmex. All six licensed crypto exchanges are approved for both cryptocurrencies and digital tokens, except for ERX, which is only approved for the latter.
The SEC distinguishes cryptocurrencies as “created for the purpose of being a medium of exchange for the acquisition of goods, services, or other rights.”
On the other hand, digital tokens are created “for the purpose of specifying the right of a person to participate in an investment in any project or business, or to acquire specific goods, services, or other rights under an agreement between the issuer and the holder,” said the financial watchdog.
What do you think about the words from the Thai SEC general secretary? Let us know in the comments section below.
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Crypto Analyst Who Called 2018’s Market Boom Reveals His Main Altcoin Position
A top cryptocurrency strategist that has gained a large following on social media after accurately calling bitcoin’s 2018 bear market bottom above $3,000, has revealed his main altcoin position on a little-known cryptocurrency. The pseudonymous analyst, known as Smart Contractor on social media, told his over 100,000 followers he has been seeing signs the market […]
A top cryptocurrency strategist that has gained a large following on social media after accurately calling bitcoin’s 2018 bear market bottom above $3,000, has revealed his main altcoin position on a little-known cryptocurrency.
The pseudonymous analyst, known as Smart Contractor on social media, told his over 100,000 followers he has been seeing signs the market correction has bottomed out this month, and sees a surge in bitcoin’s price to $60,000 as a possibility.
The trader, as Daily Hodl reports, revealed he has a large position in the scalable smart contract platform TomoChain (TOMO), which per his words has the potential to double in value against the flagship cryptocurrency. Smart Contracter used technical analysis for his prediction:
The price of TOMO has, according to CryptoCompare data, already moved up over 86% in the last 30 days, as each token is now trading at $2.4, up from a little over $1 a month ago. The cryptocurrency was below that mark for most of last year.
Smart Contracter also pointed to the S&P 500 index which, according to him, shows investors’ risk appetite is recovering, and a bull period in the equities market could also benefit crypto, he said. The analyst also named the FTX Token (FTT) as a cryptocurrency he is eyeing, as it could bounce back harder than other cryptoassets.
On social media, he said the native cryptoasset of the popular derivatives trading platform FTX “will be one of the strongest and first to recover,” based on the chart’s structure. The trader added he sees the price of FTT crossing over the $40 mark to hit a new all-time high as the cryptocurrency market recover.
It’s worth noting Smart Contracter is famous for, in June 2018, predicting the bear market that was seeing the price of bitcoin drop from a then all-time high near $20,000 would end with the coin trading at $3,200. The prediction was nearly accurate, as BTC hit the target in December of that year.