Nearly $1bn in Bitcoin Transferred from Silk Road Wallet

Background

Shut down by the FBI in 2013, Silk Road was the first modern darknet market, known for its platform for selling illicit drugs. On November 3, an anonymous user moved 69,370 BTC originating from the Silk Road site in two transactions. The activity arose from a wallet address that had been dormant since 2015.

Transaction Details

The cryptocurrency transfer was reported by researchers at CipherTrace, who noted that “BTC address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx transferred its entire balance to address bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6 via 2 separate transactions. 1 BTC was sent in the first transaction while the remaining 69,369+ BTC was sent shortly after.”

Analysis

Researchers theorized that the initial transfer was a test run to ensure the correct address. The addresses that the Bitcoin Cash (BCH) and Bitcoin SV (BSV) were sent to had no prior transactions. The transaction appeared to be a switch from an older legacy address to a newer Bech32 address format.

Bech32 Addresses

Bech32 addresses, where around 5% of BTC is held, allow for more efficient use of block space. The move to a Bech32 address format is seen as a positive step in the evolution of Bitcoin transactions.

Unknown Motive

While CipherTrace continues to monitor the addresses for any additional activity, the person and motive behind the transactions remain a mystery. Researchers speculate that the funds may have been moved to prevent hackers from accessing the wallet.dat file or that hackers have already gained access.

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