After the arrest of william ulbricht, the operator of Silk Road. the website which was used for online selling of drugs, and which used bitcoins for funding. the website was showing a message stating seized by FBI.
FBI also claimed that they seized all 26,000 Bitcoins from the operator that amounts $80 million at current rates. and which is about 5% of total bitcoins in existence.
But a recent report shows that FBI is still unable to seize the Bitcoins from The silk road operator. and that is because of the reason of privacy and protection policy of bitcoin wallet. the only way to move bitcoin out of someone’s wallet needs the private key to authorize the transiction. and FBI has been unable to overcome all the encryption used in the wallet.
When the feds arrested ulbricht, and took over the silk road site. they were able to seize all 26000 bitcoins found in the personal wallet of ulbricht. and they tranfered it into their account. but since the bitcoin transiction can be tracked publicly. users finally find the wallet address of FBI. and they took over to transfer the bitcoins to FBI’s wallet by adding comments.
as tag to the wallet address as ‘Silkroad Seized Coins’ the comments can be seen from the screenshot below, which comes in block chain of FBI.
The Authorities having access to the wallet of ulbricht, did not helped them and that cant be used. since they still need the private key to bypass the Authorization.
The bitcoins taken as part of the silk Road operation will be held untill legal proceedings have finished, then they will be liquidated, according to a FBI spokesman.
But how far is that true no one knows, they can surely spend it in their operations and funds.