Mysterious billion-dollar transaction sees dormant bitcoin wallet return from the dead

Bitcoin
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A mysterious bitcoin wallet – the fourth-largest in the world – has unexpectedly been emptied. Wallet address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx held 69,369 bitcoins, equivalent to approximately $955 million, before a huge transaction suddenly took place, sending funds crashing to near zero.

It is currently unclear who moved the funds but the account is believed to have potential ties to the Silk Road marketplace that was shut down in 2013. The Silk Road’s founder, Ross Ulbricht, was sentenced to life imprisonment two years later.

“The movement of these bitcoins today, now worth around $955 million, may represent Ulbricht or a Silk Road vendor moving their funds,” Tom Robinson, co-founder and chief scientist of crypto-compliance provider Elliptic, said in a blog post (opens in new tab). “However it seems unlikely that Ulbricht would be able to conduct a bitcoin transaction from prison. Alternatively, the encrypted wallet file may have been real, and the password has now been cracked - allowing the bitcoins to be moved.”

Ill-gotten gains

As Robinson mentions, it is possible that the account may have been hacked. It has been known that the bitcoin wallet in question has been circulating among hackers for a couple of years now, so if someone has been able to break the encryption and gain access, they could have transferred the funds. The wallet has previously lain dormant since April 2015.

Regardless of who transferred the funds, it seems they won’t be able to spend them. Shortly after reports emerged of the wallet being emptied, the US Department of Justice announced that the huge bitcoin sum had been seized by the US Government (opens in new tab) after it was confirmed that they were criminal proceeds connected to the Silk Road.

The seizure of the transferred funds does little to improve bitcoin’s credibility, with the cryptocurrency trying to move away from its previous association with illicit online activity. Nevertheless, the currency has enjoyed a good year, having enjoyed a steady climb in value (opens in new tab) since March.

Via The Block (opens in new tab)

Barclay Ballard

Barclay has been writing about technology for a decade, starting out as a freelancer with ITProPortal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.