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Silk Road Drug Trafficker Caught Laundering $19 Million in Bitcoin.

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July 22, 2019 | 

Darryn Pollock |  0 Comments| 

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A sixty-year-old man from Columbus, Ohio, has been arrested for money laundering and drug trafficking after he tried to get $19 million in Bitcoin through an exchange.

Hugh Haney was reportedly a high-profile drug trafficker on notorious dark web site, Silk Road, back in its years of operation from 2012-2013. Part of the marketplace known as Pharmville, Haney was attempting to launder $19 million of illicitly earned monies. 

The drug kingpin was brought down when he tried to move his money into an exchange which shattered the pseudo-anonymity of Bitcoin and allowed Homeland Security Investigations (HSI) to tie the money to him.

Haney is charged with one count of concealment money laundering and one count of engaging in a financial transaction in a criminally derived property. If the sentences for these crimes are to run one after each other, he could be facing 30 years of jail time. 

On the run

Silk road was only in operating for 2.5 years before it was taken down by the FBI in 2013. However, in that time, Haney is presumed to have made a small fortune. It was only until recently that the drug trafficker attempted to move some of his money, despite investigators raiding his home in 2018.

There was evidence in the raids that Haney was involved in the illicit trade of drugs, but it was when he tried to liquidate some of his earnings from Bitcoin in a cryptocurrency exchange that the HSI swooped.

The HSI seized the $19 million on the exchange and gained sufficient evidence to arrest Haney for drug trading and money laundering. 

Silk Road’s Bitcoin past

Silk Road became synonymous with Bitcoin during its heyday, and for many was their first introduction to the cryptocurrency. It was the currency of choice because of its anonymous nature

However, as Haney discovered, it was only a pseudo-anonymity as regulations force exchanges to keep track of their clients while blockchain analytics make it easy to trace transactions. 

Silk Road is estimated to have served illicit goods and services to over 100,000 buyers. According to estimates, the website alone generated revenues of over 9.5 million BTC, worth. After the site was shut down in 2013 by the FBI, approximately 26,000 BTC was seized from various digital wallets, amounting to $272 million today.
 

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