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Someone Moved $1b in Bitcoins From the Silk Road

Someone transferred 69,370 Bitcoins, worth about one billion dollars, from a wallet associated with the Silk Road darkweb marketplace.

A picture of More than 69,369 Bitcoins were transferred from a Silk Road-linked Bitcoin address

More than 69,369 Bitcoins were transferred from a Silk Road-linked Bitcoin address

According to a report from the blockchain intelligence firm CipherTrace, 69,370 Bitcoin from the Silk Road moved on November 3, 2020. The move is the first activity since April 2015. The party responsible for initiating the transfer sent the Bitcoins via the following transactions:

  • 0d13a52e3b640d05cdf31b41f335b327f126cb79d9eec1e2bc46556ef30a0b57
  • 3f036ff88bb851b57a1e28780dbce35a6457a8b57995c095b55b3b0cf48ba9fd

The coins moved from the address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx to the address bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6 in two transactions. The first transaction was for 1 Bitcoin and the second transaction was for 69,369 Bitcoin. CipherTrace suggests the first transaction served as a test.

CipherTrace:

It appears that this transaction was most likely conducted to switch between address formats. The former address is a Legacy/P2PKH address while the new address is a Bech32/P2WPKH address. Legacy addresses—the original Bitcoin address format—start with a ‘1’ while Bech32 addresses—the native segwit address format—start with bc1q. Bech32 addresses are more efficient with block space, which allow BTC blocks to hold more transactions. Additionally, Bech32 addresses are composed of numbers and only lower-case letters so there is less room for error than prior address formats. Around 5% of BTC is currently held in Bech32 addresses.

Since 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx held BTC prior to the Bitcoin Cash and Bitcoin SV hard forks (among others), the address owner would also have access to the coins associated with the hard forks. Evidently, around the same time all of the BCH at this address was moved to qqrkjml7h3ymnc7ydd9m5r9s9hnqectmluwpxezd9a via TX 8e0d6a7f4a2fb523972febdb47845585aa94dbf3252b4432e9fad8d0b5037ac1. Additionally, all of the BSV was moved to 1F884r9J2WKbu8wekebqqRcu1Bw1jiRXba via TX 5ff9c81c00bca688cc5c8713f3e38fd1f2a0a85a86de96f4afd096fdc1583fbc. Both of the addresses that the BCH and BSV were sent to had no transactions prior to today.

While it is most probable that these transactions were made to stay up to date with the Bitcoin network, there is also some speculation that the wallet could have been cracked by hackers. These movements could possibly mean that the wallet owner is moving funds to new addresses to prevent hackers from accessing the wallet.dat file or that hackers have already cracked the file.

As noted by CipherTrace, hacking is a possibility. As seen in the cases of former Secret Service agent Shaun Bridges and former Drug Enforcement Administration agent Carl Force, Silk Road funds are also an enticing target for corrupt federal agents.