Silk Road Shutdown: NY US Attorney Seizes $28 Million In Bitcoins Belonging To Ross Ulbricht

On Friday, New York U.S. Attorney Preet Bharara announced the seizure of $28 million in bitcoins that belonged to Ross Ulbricht, the alleged owner of Silk Road, an infamous online drug marketplace. According to the report, Ulbricht was arrested in San Francisco but was later sent to New York, where he faces three felony charges.

Bharara described Silk Road as “a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement.” Bharara, along with the FBI, DEA and IRS, were involved in seizing the 144,336 bitcoins from hardware owned by Ulbricht. Authorities previously seized 29,655 bitcoins and the total sum is worth approximately $33.6 million.

Earlier in October, the FBI seized Silk Road and arrested Ulbricht. According to the New York complaint, Ulbricht is being charged with “one count of narcotics conspiracy, one of count of conspiracy to commit computer hacking and one count of money laundering conspiracy.” The narcotics conspiracy charge carries a maximum sentence of life in jail with a mandatory minimum of 10 years; the computer hacking conspiracy charge carries a maximum of five years in prison; and the money-laundering conspiracy charge carries a 20-year sentence.

Silk Road was founded in 2011, operated on the Tor Network and users could purchase drugs as well as access to hit men, hacking tools and guns in exchange for bitcoins. According to the original complaint, since 2011 Silk Road's total sales revenue amounted to 9.5 million bitcoins, approximately $1.2 billion, with a commission of more than 600,000 bitcoins, around $80 million. Investigators used forensic analysis to discover a bitcoin wallet that contained 144,336 bitcoins. Bharara said the arrest serves as a warning for any individual conducting illegal activity on the Deep Web. “With his arrest and our subsequent seizure of millions of dollars worth of Silk Road’s bitcoins, we have sent a clear message to him and everyone else running criminal enterprises on the dark Web: we are determined and equipped to hold you to account,” said Bharara in a statement.

As part of the Silk Road shutdown, arrests of drug dealers were reported worldwide. One of the biggest dealers, Steven Sadler, known as “Nod” on Silk Road, was working as an FBI informant following his arrest in July. Bharara said the Silk Road investigation is ongoing and Ulbricht is expected in court in the coming weeks.