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Life comes at you pretty fast. For example, in yesterday’s newsletter, I linked to a story about how almost $1 billion in Bitcoin disappeared without a trace, from an online wallet.
“By definition,” I added confidently yesterday, since it was Bitcoin, “we’ll almost certainly never know anything more about it.”
Guess what? Not even 24 hours later, we know a lot more about it.
On Thursday, the U.S. Department of Justice announced that it had seized more than $1 billion in Bitcoin, associated with the 2015 prosecution of the dark web marketplace, Silk Road.
The amount, and more importantly the account number — “1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx” — match up to what was described in yesterday’s story.
DOJ calls the account “1HQ3” for short, so we’ll do the same here. Also, sharp eyed readers will note that “almost $1 billion” is not the same as “more than $1 billion;” more on that in a second.
First, just quick background: If you don’t know the story of Silk Road, and how its founder, Ross Ulbricht, was captured, it’s fascinating and tragic.
Silk Road was an underground Internet marketplace to buy and sell all kinds of drugs and other illegal contraband. The government says that led to even more depravity, up to and including murder-for-hire.
As for Ulbricht himself, I pity the guy; everything I’ve read suggests he was both super-smart, and wildly misguided. Now, he’s now 36 years old and doing two life sentences plus 40 years without parole. Man, what a waste of a life.
Also, despite supposedly being a criminal mastermind, he was caught (partly) because of an incredibly dumb mistake—using his personal gmail address on an online message board when he was setting up Silk Road.
Anyway, two more details:
The first is how the government says it connected the $1 billion to Silk Road. In short, back in 2012, someone it refers to as “Individual X” in court documents hacked into Silk Road itself, and stole the money.
According to Justice, “Ulbricht became aware of Individual X’s online identity and threatened Individual X for return of the cryptocurrency … Individual X did not return the cryptocurrency but kept it and did not spend it.”
The Justice complaint doesn’t quite spell it out, but I’d hazard a guess that maybe Individual X has now been arrested for some other crime, and he or she gave up the Bitcoin as part of a deal.
The second detail? It has to do with that “almost $1 billion” versus “more than $1 billion.”
Back in 2012, when Individual X allegedly stole the money from Silk Road, the Bitcoin was worth a total of about $354,000.
In 2013, when Individual X dropped the bitcoin into “1HQ3,” it was worth $14 million.
When it was withdrawn from the wallet less than a week ago? $960 million.
And then yesterday? More than $1 billion, according to Justice.
All of which means that if Ulbricht, the supposed genius who built an entire illegal marketplace that ran on Bitcoin, had instead just focused on Bitcoin itself, he might have been a very wealthy person, today.
Instead, he’s in a federal maximum security prison, for life. Big mistake.
7 other things worth your time
Let me start with a few quick links in case you don’t know the Silk Road story and you’re interested. The first is about the unsung hero, an IRS agent in fact, who figured out how to find Ulbricht. The second: 5 stupid things Ulbricht did to get caught. Also, one more: the rather heartbreaking story of how his crimes and sentence affected his family. (NYT, The Guardian, Yahoo News)
Ah, the election. As of when I’m putting this to bed, and as we enter Election Day +3, the votes in five states: Pennsylvania, Georgia, Nevada, North Carolina and maybe Arizona are still up in the air with razor-thin margins. (Also Alaska, but President Trump will win there.) I’m not going to even get into all the things Trump had to say in his White House speech last night; by the time you read this you will have heard it all and made up your own mind. Let’s hope by Monday’s newsletter, we have a president-elect. (Fox News, USA Today)
Want to work for ESPN? Not a good time, the sports network is cutting 500 jobs. (The Wrap)
The U.S. hit yet another daily Covid infection record yesterday, and DC is doing something similar to NYC now, requiring Covid tests upon entry to the city. Also, a study found that 20 percent of grocery store workers in Boston tested positive for Covid-19, although 76 percent had no symptoms. (AP, WTOP, BMJ, study was in the journal Occupational & Environmental Medicine)
I forgot about this yesterday, but it’s timely. Just wanted to point out another ballot measure: Colorado became the 15th state, plus DC, to pledge to have its electoral college electors support the winner of the national popular vote. It’s all part of an interesting strategy to try to get rid of the Electoral College without having to amend the U.S. Constitution—but we’d be years away from implementation. (Vox)
Dog shoots man in Texas, leading police to share some gun safety tips. (Star-Telegram)
Finally, this probably won’t happen, but two rural, conservative counties in liberal Oregon (which decriminalized hard drugs this week), are seeking to secede from their state and instead join neighboring, much more conservative Idaho. (Yahoo News)
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