In November 2020, the U.S. Department of Justice (“DOJ”) experienced a cryptocurrency “windfall” of assets. It seized more than $1 billion of Bitcoin as part of a civil forfeiture complaint stemming from the Silk Road investigation and prosecution. Silk Road was the most sophisticated and extensive criminal marketplace on the Internet to date. While in operation, it distributed illegal narcotics to over 100,000 buyers and offered other illegal activities – like computer hacking and murder for hire. It was the criminal utopia of the dark web. Silk Road also used a complex “tumbling” technique to thwart efforts to locate the Bitcoin transactions used to pay for illegal activities. In its seizure, the DOJ seized some 70,000 Bitcoin, currently trading at over $16,000 per Bitcoin.
Also, in November, the DOJ – in connect with a mutual legal assistance treaty (MLAT) with Brazil – seized cryptocurrency worth over $24 million. It was against a Brazilian National who was involved in a Ponzi scheme to entice investors to invest in corporations buying cryptocurrency but only a very small amount of investor funds were actually invested in cryptocurrencies as promised – and very little was returned to the investors. The DOJ targeted the Brazilian National’s US controlled crypto assets and seized them pursuant a Federal District Court order.