On Friday, October 16, 2026, the United States government filed a complaint in the US District Court for the Southern District of New York seeking forfeiture of about 7.32 Bitcoin and an equal amount of Bitcoin Cash that prosecutors say can be traced to illegal drug sales on the Silk Road marketplace.
The civil action, brought in rem against the digital assets themselves, was filed by the U.S. Attorney’s Office for the Southern District of New York. James M. McDonald is the U.S. Attorney, and Assistant U.S. Attorney T. Josiah Pertz signed the filing. The assets are listed as 7.31968106 Bitcoin and 7.31967705 Bitcoin Cash. They were formerly held in a Kraken exchange account and are now in the custody of Homeland Security Investigations.
According to the complaint, Silk Road operated from roughly 2011 to 2013 on the Tor network and accepted only Bitcoin. It served as a marketplace for narcotics, hacking services, malicious software, forged documents and stolen financial information, and it charged commissions of roughly 8 to 15 percent on each sale. Prosecutors say vendors shipped controlled substances to customers in the Southern District of New York.
The government alleges the funds originated with a Silk Road vendor known as “SuperHighFly,” who sold controlled substances, including THC, for Bitcoin. Beginning around January 17, 2013, Bitcoin from that vendor’s account was transferred to an account at Mt. Gox, the Tokyo-based Bitcoin exchange, opened that day by an individual identified in the filing only as “Individual-1.”
The complaint says that of roughly 467.943 Bitcoin deposited into that Mt. Gox account from all sources, about 456.75 Bitcoin, or 97.6 percent, came directly from the vendor’s Silk Road account. It cites transfers of 75 Bitcoin on September 15, 2013, and 94 Bitcoin on September 19, 2013. Prosecutors say the account balance never fell below the amount of the seized assets.
Mt. Gox shut down in February 2014 and entered liquidation in Japan, leaving an estimated 750,000 customers unable to withdraw funds. A court-appointed rehabilitation trustee later oversaw repayment of creditors under a plan approved in 2021, using Kraken among other exchanges to distribute funds.
Individual-1 submitted a claim and designated a Kraken account to receive payment, the complaint says. On March 25, 2025, the trustee sent funds to Kraken, which credited the account. The Bitcoin Cash stems from the August 2017 split of the Bitcoin network, which gave each Bitcoin holder an equal amount of the new currency.
The same day, Magistrate Judge Valerie Figueredo issued a seizure warrant, and Kraken moved the assets to a wallet controlled by Homeland Security Investigations.
The government makes two claims for forfeiture. The first invokes Title 21, Section 881(a)(6), covering proceeds of drug transactions. The second invokes Title 18, Section 981(a)(1)(A), covering property involved in money laundering.
Please contact BlockTribune for access to a copy of this filing.
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