The enigmatic journey of the $1.06 billion Bitcoin heist

In 2018, the seventh-largest Bitcoin wallet at that time, containing a substantial 69,000 BTC, was unexpectedly discovered in a less explored corner of the internet.

The Bitcoin had been dormant since April 2013. The wallet’s origins were traced back to the shuttered Silk Road darknet market. The marketplace was closed in late 2013 due to illicit activities, and in 2015, its founder, Ross Ulbricht, received a double life sentence plus 40 years with no chance of parole.

Notably, the funds had remained inactive for years after their initial deposit. Then, for the first time in seven years, the billion-dollar worth of BTC witnessed movement in 2018 out of the Bitcoin address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx.

According to Tom Robinson, chief scientist and co-founder at Elliptic, an encrypted file had been circulating on hacker forums since its discovery, purportedly containing the cryptographic keys required to seize the BTC at this address. If genuine, cracking the password on this file would have allowed the BTC to be moved.

Apart from this movement, 101 BTC were sent to BTC-e in 2015, a cryptocurrency exchange notorious for being favored by money launderers that was subsequently taken down by U.S. law enforcement in 2017.

According to Robinson, the transfer of the BTC could have been initiated by Ulbricht or a Silk Road vendor accessing their funds. However, the possibility of Ulbricht conducting a Bitcoin transaction from prison seemed unlikely. Alternatively, the encrypted wallet file might have been genuine, and the password could have been successfully cracked, enabling the BTC to be moved.

Upon deeper scrutiny of the Bitcoin address, the United States
Attorney’s Office and Internal Revenue Service criminal investigation
agents discovered
its connection to Individual X (individual’s identity known to
concerned authorities), who was found to have hacked funds from Silk Road.