Blockchain analysis has reportedly linked a crypto wallet associated with the defunct darknet marketplace, Alphabay, to a substantial Bitcoin donation made to the creator of Silk Road, Ross Ulbricht. The donation, valued at $31 million, was made earlier this month according to a report from blockchain analytics company, Chainalysis.
Chainalysis disclosed to WIRED on June 5 that the 300 Bitcoin (BTCUSD) donation to Ulbricht is believed to have originated from Alphabay. This market operated from 2014 to 2017, serving as a precursor to the Silk Road.
Director of investigations at Chainalysis, Phil Larratt, stated, “We have reasonable grounds to suspect that these funds originated in AlphaBay”. He speculated that the donation likely came from a major vendor on the platform with access to such significant amounts.
Further corroborating this claim, independent blockchain investigator ZachXBT confirmed that the 300 Bitcoin did not originate from Silk Road, and there were noticeable patterns in how the donor moved the funds. ZachXBT pointed out the use of multiple mixing services to blur the transaction trail and the cashing out of other cryptocurrencies in small increments to avoid detection. These factors suggest a possible criminal origin.
ZachXBT noted the donation seemingly came from a “dodgy centralized mixing service”, Jambler, while ordinary privacy enthusiasts typically use decentralized mixers, such as Wasabi and the now-defunct Samourai.
ZachXBT suggested to WIRED that although the money appears to be a “legitimate donation,” the funds themselves do not seem to be legitimate. The use of multiple mixers and CEX (centralized exchange) deposits spread out is a typical strategy for avoiding seizure of illicit funds.
Chainalysis was pivotal in identifying Bitcoin addresses linked to AlphaBay, significantly contributing to the 2016-2017 “Operation Bayonet” investigation, which led to the darknet marketplace’s takedown. If the Bitcoins donated to Ulbricht had been held since then, they could have appreciated over 40 times their original value. The identity and motivations of the donor, however, remain undisclosed.
In January, US President Donald Trump pardoned Ross Ulbricht, who had been serving a double life sentence plus 40 years for his role in creating and operating Silk Road.
