The enforcement authorities are “ignoring” sizable stashes of “forked” crypto assets once they make bitcoin seizures from criminals, consistent with research from blockchain analytics and RegTech company Coinfirm.
Within an official web-blog published, Coinfirm revealed that it’s found “substantial funds” left in wallets by government agencies which will still be accessible by criminals.
The post cites as an example the recent seizure by the U.S. Department of Justice of over $1 Bln in Bitcoin [BTC, +1.95%] said to have been hacked from defunct dark market Silk Road.
An anonymous character, “Individual X,” is claimed to have assisted the DoJ in gaining access to the wallet and reciprocally walked away with no charges.
However, Coinfirm added that it tracked the funds to other wallets for cryptocurrencies that were forked from bitcoin and located that these funds haven’t been yet seized.
Forking is when a blockchain splits into two different versions, sometimes creating a new cryptocurrency within the process.
Coinfirm added that it had found wallets associated with the Silk Road assets for the forked coins bitcoin private, bitcoin diamond, and super bitcoin, that together contain a sum of $387k in those crypto-assets.
“Whoever has access to the private keys of the most wallet, can still have access to those funds,” Coinfirm added.
The firm added that it’s further found “dozens of cases” within which authorities may have left funds accessible to suspects “instead of properly accounting for and seizing those assets.”
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