In November 2020, a person identified by the U.S. Department of Justice only as “Individual This anonymous individual enters a long string of Bitcoin private keys on Gambarian's laptop, allowing Gambarian to move 69,370 Bitcoins from Individual X's Bitcoin address to an address controlled by the U.S. government. I made it.
In the four years it took the U.S. government to establish legal ownership of the huge amount of Bitcoin (identified by the IRS as proceeds stolen from the Silk Road dark web drug market), its value was staggering. It increased to $4.4 billion. The forfeiture of this money appears to have been part of a deal to keep Person X out of prison, but the terms of that deal were never made public.
Instead, in a strange twist of fate, Gambarian, the IRS criminal investigator who tracked down and seized a record-breaking amount of cryptocurrency, ended up in a Nigerian coffer while the billions of dollars ended up in a coffers in the United States. He is in prison.
On Wednesday, the U.S. Supreme Court declined to hear an appeal of a lower court's ruling that the U.S. government can seize about 70,000 Bitcoins belonging to Individual X. The individual allegedly stole the money from Silk Road by exploiting a security vulnerability more than a decade ago. market. The stolen drug funds have since been claimed by various parties, most recently a company called Battle Born Investments, which has filed an appeal against the seizure judgment and claims it bought Silk Road's Bitcoin through bankruptcy proceedings. I am doing it. Four years after the IRS Criminal Investigation's Gambarian-led investigation traced the stolen money, it's only now that the appeals have failed that the U.S. government finally officially takes ownership of the wayward Bitcoin. You can. As well as small amounts of virtual currency seized in the past, the U.S. Marshals Service.
“The Supreme Court's decision not to hear this case means that this case will be forfeited to the U.S. government,” said Will, one of the U.S. prosecutors who handled the Person X case and now an attorney at the Justice Department.・Frentzen says. Morrison Foerster Company. “This is the largest ever seizure of cryptocurrencies sent to the U.S. Treasury Department.”In fact, thanks to Bitcoin's extraordinary appreciation in recent years, this is believed to be the largest seizure of criminal money in history. . all kinds of It will be added to the US federal budget. (The seizure following the theft of 120,000 bitcoins from cryptocurrency exchange Bitfinex was even larger, but will likely be repaid to victims and creditors rather than kept by the government.)
But over the same years, Gambarian has taken an even more unlikely path. In 2021, he left the IRS to become head of investigations at Binance, the world's largest cryptocurrency exchange. The move is widely seen as a belated move by Binance. Last year, the company paid a $4.3 billion criminal fine to the U.S. government as it sought to clean up its use, which is widely used for money laundering. It was Gambarian who was invited to Abuja to negotiate with the Nigerian government earlier this year when Nigeria followed up on this fine by accusing Binance of similar criminal acts and devaluing its currency. Instead, the Nigerian government detained Mr. Gambarian, confiscated his passport, and imprisoned him for more than six months on charges of money laundering and tax evasion on behalf of his employer.
