U.S. Seeks Forfeiture of Bitcoin Tied to Silk Road Drug Sales

On Monday, April 28, 2025, the United States government filed a forfeiture complaint in the US District Court for the Southern District of New York, targeting approximately 8.19 Bitcoin (BTC) and 8.19 Bitcoin Cash (BCH) seized from a BitGo account. The assets, valued as proceeds of illegal activities, were allegedly linked to the now-defunct Silk Road, an online black market that operated from 2011 to 2013.

The complaint claims the cryptocurrencies were derived from narcotics trafficking and money laundering conducted through Silk Road. The platform facilitated the sale of illegal drugs, including heroin, cocaine, and methamphetamine, as well as other illicit goods and services like hacking tools and forged documents. Silk Road operated on the Tor network, using Bitcoin to maintain user anonymity and employed a “tumbler” to obscure transaction trails on the Bitcoin blockchain.

According to the filing, two Silk Road users, identified as “CalifornianDream” and “Honeycomb Labs,” sold marijuana in large quantities on the platform, receiving Bitcoin as payment. Between August and September 2012, approximately 276 BTC were transferred from CalifornianDream’s Silk Road account to an account at Mt. Gox, a Tokyo-based Bitcoin exchange, opened by Christian Verdun. In September 2013, about 18.32 BTC from Honeycomb Labs’ account were sent to a wallet and later moved to Verdun’s Mt. Gox account through multiple intermediary wallets.

By November 2013, after several transfers, at least 8.19 BTC from these transactions remained in Verdun’s Mt. Gox account. When Mt. Gox collapsed in February 2014, locking customer funds, Verdun’s account held approximately 54 BTC. Following a 2017 Bitcoin fork, the account’s Bitcoin holdings generated an equivalent amount of Bitcoin Cash. In 2024, the Mt. Gox Rehabilitation Trustee transferred the seized 8.19 BTC and 8.19 BCH to a BitGo account Verdun had opened in 2022, which the government seized in December 2024 under a warrant.

The forfeiture action cites violations of federal laws, including Title 21, which allows seizure of assets tied to drug trafficking, and Title 18, which targets property involved in money laundering. The government alleges the cryptocurrencies are traceable to illegal drug sales and were used in transactions designed to conceal their illicit origins.

Please contact BlockTribune for access to a copy of this filing.