Bitcoins from the Silk Road Traced to Ross Ulbricht’s Laptop
The prosecutors traced bitcoin worth $13.4 million from the Silk Road to Ross Ulbricht’s laptop.
Those who still think bitcoin is fully anonymous money of internet have been proven wrong by the US government.
A clear demonstration was given by Ilhwan Yum, a former federal agent, who showed in a courtroom how he traced thousands of bitcoins from the drug trafficking website Silk Road to Ross Ulbricht’s personal computer.
Thirty years old Ross Ulbricht has been accused of running the Silk Road and this is a good evidence.
Yum explained how he traced 3,760 bitcoin transactions conducted over 12 months until August 2013. The clear path from the Silk Road servers to a Samsung 700z laptop owned by Ross Ulbricht was shown.
The FBI had seized this laptop when they arrested Ulbricht in October 2013. He followed over 700,000 bitcoins from the marketplace to Ulbricht’s personal wallets.
Calculating based on exchange rates during the time each transaction was made, Yum concluded that Ross transferred bitcoins were worth around $13.4 million.
When prosecutor Timothy Howard questioned Yum, “You mean direct, one-to-one transfers? He replied by saying, “Yes, direct, one-to-one transfers.”
The testimony by Yum was in line with other evidences which connected Ulbricht to the Silk Road trail. On the laptop was a journal with details of the Silk Road’s creation.
A testimony from a college friend who confirmed that Ulbricht confessed about creating the web site to him also show Ross Ulbricht’s involvement.
Ulbricht’s defense, however, argued that even though he founded the Silk Road, he soon gave it up to the website’s real owners. According to them, the real owner lured Ulbricht back before his arrest, as he was the perfect fall guy.
According to Yum’s analysis, Ulbricht received bitcoin transfers from the website servers in data centers near Reykjavik and Philadelphia even after the time his defense argued he gave the site up.
Yum’s testimony basically confirms what most bitcoin users already know. It shows that bitcoin is not really untraceable. Neither is it anonymous by default.
If one can find a user’s bitcoin addresses, then they can be used to trace the user’s transactions too.
The total trail of drug-tainted coins found makes up more than 4 times the bitcoins from Ulbricht’s laptop. It is unclear from Yum’s testimony where the other coins are.
Yum said that the withdrawals from Silk Road could be tied to users, especially after Silk Road’s servers were seized by the FBI.
Bitcoin Fog, Dark Wallet and other bitcoin anonymity tools could obscure the trail, but it does not seem that Ross Ulbricht used any of those protections.
Instead, he transferred the bitcoins directly to his wallet. Testimony from FBI agents indicated that Ulbricht believed his hard-drive’s encryption would stop anyone from linking his bitcoin addresses to his real world identity.
When Ulbricht’s defense attorney, Dratel, asked Yum if Ulbricht could have simply used Silk Road as a bitcoin wallet, Yum admitted in a skeptical tone and said “Yes, it could be done. I wouldn’t maintain my bitcoins that way.”