The Wiretap: A $60 Million Bitcoin Seizure Shows Cops Are Still Chasing Down Silk Road Dealers
Subscribe to The Wiretap, your weekly digest of cybersecurity, internet privacy and surveillance news, here.
Earlier this month, a significant development in the cat-and-mouse game between law enforcement and dark web dealers came to light. In a move that highlights the enduring efforts of US authorities to track down illicit crypto transactions, the U.S. Attorney for the Western District of Texas ordered a seizure of approximately 749 Bitcoin, valued at around $62.5 million. This bust also included hundreds of thousands in various currencies, gold coins, and bars. According to the Justice Department, these assets were linked to an illicit operation carried out by two individuals: one was a notorious drug dealer on Silk Road, while the other helped him launder his crypto.
The identities of these men have not been disclosed due to the absence of public charges against them. Nevertheless, their joint activities illustrate that despite Silk Road's creator, Ross Ulbricht, being pardoned by President Trump shortly after taking office, others who sold narcotics on the dark web site remain under investigation and are still pursued by US authorities for their illicit proceeds.
The seizure also underscores a peculiar phenomenon: even years after Silk Road was shut down in 2015, some of its former dealers have amassed substantial fortunes, enjoying their ill-gotten gains for nearly a decade. This case serves as a reminder that the dark web's legacy extends far beyond its closure and continues to impact law enforcement efforts.
Meanwhile, another cybercrime development is gaining attention: Feds Suspect LastPass Hackers Stole $150 Million In Crypto From One Person. According to court records, the LastPass hackers stole XRP from a single user using logins stolen in 2022. This pilfered cryptocurrency was worth $150 million when it was taken but now stands at approximately $715 million.
Two Chinese nationals have been indicted for their alleged involvement in cyberattacks on numerous American government entities and businesses, including a hack of the U.S. Treasury earlier this year. According to FBI Acting Assistant Director Roman Rozhavsky, "The defendants allegedly waged a yearslong hacking campaign against U.S.-based organizations to steal their data and sell it to various customers, some of whom had connections to the Chinese government."
The Department of Justice also announced the takedown of Garantex, a cryptocurrency exchange accused of facilitating $96 billion in illicit transactions. Prosecutors claimed that Garantex received hundreds of millions of dollars in criminal proceeds used in various crimes, including hacking, ransomware, terrorism, and drug trafficking.
Elon Musk recently claimed that X (the site formerly known as Twitter) had been the victim of a heavy cyberattack originating from Ukraine. However, experts say the site was hit by a distributed denial-of-service attack, making it challenging to pinpoint its origin.
Flock Safety, which offers AI surveillance technology, is raising $250 million at a valuation of $7.5 billion, with Andreessen Horowitz leading this round, as previously reported by Forbes. Flock has been expanding aggressively, sometimes risking breaches of the law in the process. Its expansion strategy has put it at odds with its former partner and rival, Axon Enterprise.
According to an FTC report, consumers have lost more than $12.5 billion to fraud in 2024, a 25% increase over 2023. Of this total, as much as $5.7 billion was lost to investment scams. A recent example of such an investment scam involves Trump supporters being duped into believing their Trump-themed coins and memorabilia were worth millions.
One woman was convinced enough to send the tricksters $150,000 in “fees,” only for her money to end up in the pockets of the scammers. This incident highlights the dangers of investing in unverified opportunities and underscores the importance of due diligence when dealing with such deals.