- A federal judge issued an arrest warrant for about 392 Bitcoin, valued at about $ 16 million, which U.S. lawyers said belonged to a group of Darknet drug dealers.
- US prosecutors said the owners bought a Triumph fishing boat in 1974 and a California squid license to “hide and disguise” drug money.
- Bitcoin’s value is more than 10 times what it was in January 2019, when it was found during a search of a home in Ventura, California, according to the complaint.
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A federal judge issued an arrest warrant for about 392 Bitcoin, valued at about $ 16 million, which U.S. prosecutors said belonged to a group of Darknet drug dealers.
Bitcoin, along with an old fishing boat and a squid catch license, has been held by the US Marshals since 2019, according to a confiscation complaint filed in the district court on December 29. Lawyers said a group of Darknet drug dealers held much of their money in Bitcoin and laundered $ 600,000 with the purchase of a California squid license and a 1974 Triumph fishing vessel.
Bitcoin 391.5873617 was worth about $ 16 million on Sunday morning, more than 10 times what it was when it was discovered during an operation in Ventura, California, in 2019. The owners, who the lawyers said had been arrested, were not identified .
In the confiscation claim, bitcoin, the license and the boat are listed as “Defendants”.
“The defendants are in the custody of the United States Police Service in this District, where they will remain subject to the jurisdiction of this Court pending this action,” said the filing.
The Justice Department lawyers who filed the complaint did not respond to a request for additional information about the request for confiscation, trespassing or defendants.
As Treasury officials adopt new regulations to attack money laundering via Bitcoin and other cryptocurrencies, the case is a reminder that some treat currencies the same as money. Bitcoin can be kept in a home and $ 16 million in Bitcoin fits in a wallet.
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Without more information, it is difficult to say exactly how Bitcoin was stored, but it seems clear that it was in a wallet designed to keep it offline. The lawyers described it as a “cold storage” wallet. Earlier this month, Square CEO Jack Dorsey, owner and promoter of Bitcoin, posted a guide to setting up a similar offline wallet.
—Jack (@jack) January 3, 2021
By the time Darknet Bitcoin was seized by federal agents in January 2019, the price of Bitcoin was fluctuating around $ 3,400. By the time the U.S. District Court for the Central District of California issued its warrant on Monday, Bitcoin was above $ 30,000, although it has briefly fallen below that mark. On Friday, Bitcoin rose more than $ 41,000 for the first time.
The seized Bitcoin was won by selling illegal drugs in several Darknet markets, according to the confiscation complaint.
According to U.S. prosecutors: “The defendant Bitcoin was derived from the sale of illegal drugs, including fentanyl patches and opioids dispensed over the counter, on Darknet between 2016 and 2019.”
They added: “The Seller started selling illegal drugs on Darknet in approximately 2014, using various markets, including Dream, Silk Road, AlphaBay and Wall Street Market, and from 2014 onwards he earned approximately $ 250,000 in Bitcoins per month with illegal drug sales. “
Investigators made controlled purchases from dealerships between December 2017 and May 2018, before breaking into Ventura’s home on January 11, 2019, according to the complaint.
After the operation, authorities said they found that $ 600,000 in Bitcoin had been converted into cash, according to American lawyers.
To “hide and disguise” this, traffickers used the money to buy a 1974 Triumph fishing boat and a California squid license issued by the Department of Fisheries and Wildlife, both now in federal hands.
The case, United States of America vs. 391.5873617 in Bitcoin, et al., It was assigned last week to District Judge Christina A. Snyder and Judge Jacquieline Chooljian, according to a filing on Monday. Snyder was appointed to the federal bench by then President Bill Clinton in 1997.