Saturday, January 17, 2015

"It Took Me Two Clicks To Trace Ross Ulbricht To Silk Road"

By its very nature Bitcoin is an extremely trackable exchange instrument. It is much more trackable than cash or gold.

Anyone who thinks that Bitcoin is a libertarian alternative currency that will somehow protect from e government becoming aware of identities behind transactions is sadly mistaken.

Computer security researcher at the International Computer Science Institute in Berkeley, Calif,.Nicholas Weaver, writes in Forbes:
After only three days into the trial of Ross Ulbricht, the alleged kingpin of the underground drug marketplace known as the Silk Road, the defendant’s situation is going from bad to worse. I previously wrote how the prosecution could follow the Bitcoin to show that Ulbricht ran Silk Road. Its no longer speculation: I’ve already identified a 3255 BTC (roughly $300,000 at the time) payment from Silk Road to Ulbricht. The prosecution can undoubtedly find many more.
@1mp0ster on Twitter pointed me to walletexplorer, a Bitcoin wallet explorer that uses clustering approaches and already has put in heuristics to cluster wallets. With just a couple of clicks (in fact, the first few clicks I tried), I was able to discover this Ulbricht wallet. We know this is Ulbricht’s wallet because it was seized by the FBI.
This wallet was funded with two transactions on August 21st, 2013. Both transactions are believed by WalletExplorer to be from the Silk Road Marketplace. But we don’t need to depend on WalletExplorer’s  heuristics. One of the wallets which funded Ulbricht’s wallet is this one. We know this wallet is from Silk Road because it too was seized by the FBI. Thus we can generally assume that all the wallets in this transaction are Silk Road, since this was a single transaction paid to a single wallet belonging to Ulbricht.
Thus this single transaction of 3255 BTC (roughly $300,000 at the time) on August 21st, 2013 is directly from Silk Road to Ulbricht’s admitted stash of Bitcoins. This is just the first one I’ve found. The prosecution, with access to the Silk Road and Ulbricht’s wallets, can almost certainly show many, many more. I think the prosecution futures just paid out in full.

1 comment:

  1. Bitcoin has always been a honey trap. It has all of the classic characteristics of one, and it's that obvious to actual libertarians that bitcoin is obvious more dangerous and fraudulent than fiat funny money.