An FBI agent involved in the Silk Road investigation has shared his experiences in following the Bitcoin trail back to Ross Ulbricht's wallet. Ulbricht was convicted earlier this month as the mastermind of the illegal marketplace and faces from 20 years up to life in prison.
In an interview with Risk & Compliance Journal, reposted on Wall Street Journal, Ilhwan Yum described how Silk Road generally employed the use of a "Bitcoin Tumbler" to obfuscate transactions within the Silk Road network.
However, 88% of transactions from Silk Road to Ulbricht's laptop wallet proceeded in their natural form. The only remaining question was the identity behind the address.
As to why no care was taken to "tumble" these as well, Yum speculated that the one controlling the address believed that it wouldn't be linked to its owner.
He sought to dispel the notion that bitcoin can be as anonymous as cash. In some respects, bitcoin transactions are the least private: every single one is broadcast to the world. He said:
"A lot of people compare bitcoin to virtual cash. Cash transactions are hard to track, but imagine if every serial number [on a bill] used in a transaction was recorded and announced to the public. Limited to that alone, you can't track who made the transaction, but you can see a transaction happened."
He also said that even the tumbled transactions weren't "as complicated as advertised," declining to offer details.
Technologies like Darkcoin, Dark Wallet and others intensify the anonymity arms race, employing sophisticated splitting, mixing and other obfuscation techniques. Time will tell who gains the upper hand.
Yum was reportedly the agent who transferred Silk Road and Ulbricht's bitcoins to a government wallet, later to be auctioned off.
