$31 Million Bitcoin Gift to Ross Ulbricht Linked to AlphaBay, Not Silk Road

Ross Ulbricht, the founder of the Silk Road marketplace currently serving time, recently received a significant donation of $31 million in Bitcoin from an undisclosed source. This generous contribution occurred just a few months after his sentence was commuted by the former US President.

The large transfer has led to speculation regarding the origins of the funds, with some suggesting it might be tied to Ulbricht’s previous earnings from Silk Road. However, analysis from a cryptocurrency tracing organization indicates that the 300 BTC donation traces back to AlphaBay, another online marketplace that was operational from 2014 until 2017, postdating the downfall of Silk Road.

AlphaBay was noted to be substantially larger than Silk Road at its peak and was heavily involved in the exchange of illegal goods and services. An expert from Chainalysis mentioned there are strong reasons to believe that the Bitcoin originated from someone linked to AlphaBay, probably a former seller due to the substantial amount involved.

A noted blockchain analyst previously investigated the donation and confirmed that it did not originate from Silk Road. Despite efforts to anonymize the transaction through mixing services, the analyst was able to trace the funds to a wallet identified by Chainalysis as associated with illegal operations. He communicated that the donation might be real; however, the source of the funds was suspect.

Further investigation revealed that the sender employed strategies to remain inconspicuous, having cashed out previous cryptocurrency transactions in smaller, staggered amounts, rather than one large withdrawal. This approach is often seen as an attempt to dodge asset freezes and minimize scrutiny from authorities.

While the specifics of how the donation links to AlphaBay remain undisclosed, it is acknowledged that the tracing firm has a reputation for tracking illicit blockchain activities. Their work significantly contributed to dismantling the AlphaBay marketplace in a coordinated operation by law enforcement agencies.

This crackdown ultimately resulted in the sentencing of an AlphaBay moderator to 11 years behind bars. Meanwhile, Ulbricht has yet to make any public comments regarding the recent Bitcoin donation.