Record-Breaking Bitcoin Seizure Lead Australian Police Back to Silk Road

Record-Breaking Bitcoin Seizure Lead Australian Police Back to Silk Road

Police in the Australian state of Victoria have seized almost A$8.5 million ($6 million) in Bitcoin from online drug traffickers, in the country's largest-ever cryptocurrency seizure.

According to a press release, Victoria Police also seized drugs believed to be cannabis, Psilocin, MDMA, prescription medication, and "white powder and crystals." Per local news outlet The Age, the cryptocurrency seized is understood to be Bitcoin.

"This is the 21st-century version of drug trafficking and money laundering, with criminals using technology to enable immense amounts of community harm and misery," Commander Mick Frewen of Victoria Police Crime Command said in a statement accompanying the release.

A 31-year-old woman and a 30-year-old man were arrested and interviewed, before being released pending further inquiries. The woman was charged with possession of cannabis.

The Silk Road, Bitcoin connection

The Age reported that law enforcement is investigating the pair's activities on the now-defunct Silk Road website. According to Victoria Police, the arrests and seizures were part of an investigation launched in 2021 into "drug trafficking on a dark web platform dating back to 2012."

"Police actively work on these forums and receive information from a wide range of sources including our Australian and international law enforcement partners," said Frewen.

One of the earliest and most popular dark web marketplaces, Silk Road was one of the first sites that enabled users to make purchases in Bitcoin. It did a roaring trade in drugs, and other illegal (and legal) items, before it was shut down by the FBI in 2013. According to a 2013 Mashable analysis, the site generated about $1.2 billion in sales over two years.

Silk Road's founder, Ross Ulbricht (aka "Dread Pirate Roberts") was arrested in an FBI sting operation in 2013. Convicted on counts of money laundering, conspiracy to commit computer hacking, and conspiracy to traffic narcotics, Ulbricht was sentenced to double life imprisonment without the possibility of parole.

He definitely has issues, but the sentencing seems a bit high— Elon Musk (@elonmusk) February 10, 2021

Ulbricht has become something of a cause célèbre for crypto advocates, with a petition to free him racking up 200,000 signatures in 2019, and a Times Square billboard calling for his release appearing in 2020.

Hopes for a clemency bid from then-President Trump were, however, dashed when Ulbricht wasn't named among a flurry of pardons in Trump's final days in office. In 2021, Tesla CEO Elon Musk weighed in, calling Ulbricht's sentence "a bit high."

Much of the site's Bitcoin was seized by law enforcement and auctioned off; something that the authorities may have cause to rue.

With Bitcoin's price having soared since 2013, the government has lost out on billions of dollars by selling rather than holding onto the seized Bitcoin. In July 2014, venture capitalist Tim Draper bought nearly 30,000 BTC seized from Silk Road.

At the time it was worth around $19 million; it's since risen to $1.4 billion.

Some of the money from Silk Road remains unaccounted for, however, with as much as 444,000 BTC (worth $20 billion at current prices) reportedly still missing as of November 2020. They join the 3.7 million Bitcoin that are likely lost forever.

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