Nearly $500k Sitting Unclaimed in Silk Road 2.0 Bitcoin Wallets

Silk Road 2.0 reports that 1,000 BTC has not been claimed by users affected by its February security breach.

Apr 23, 2014 at 3:35 p.m. UTC

Updated Sep 14, 2021 at 2:07 p.m. UTC

Notorious online black market Silk Road 2.0 lost roughly 4,476 BTC (then roughly $2.6m) early this February when its security was compromised in a transaction malleability attack.

However, the repayment plan it subsequently implemented is already seeing success, a new report from Vice suggests. The media outlet indicates that 50% of the site's hacking victims have been completely repaid as of 8th April.

Announced on 17th February, Silk Road 2.0's repayment plan sought to reimburse the estimated 47% of its users that lost bitcoins in the breach. To refund the accounts, Silk Road 2.0 moderators agreed to go without payment and to charge 5% commission on purchases, with the proceeds going towards paying back victims.

Most notably, however, Silk Road 2.0 moderator Defcon said that more than 1,000 BTC ($483,698 at press time) is still sitting unclaimed in the wallets of users who have not logged into the site since the breach.

Silk Road 2.0 launched on 6th November following the shutdown and seizure of the original Silk Road in October of last year. As of 13th March, Silk Road 2.0 indicated that more than 13% of the stolen funds had been repaid.

More details

Speaking to Vice, one representative of Silk Road 2.0, named DoctorClu, elaborated on why he believes so many users have yet to reclaim funds.

Said DoctorClu:

"Most simply did not think that such a large repayment was possible given its amount. Like so many other hacks/seizures/scams, many could not believe that we would ever be able to give back what was stolen, or that we would even promise such a thing."

The news source went on to suggest that continued questions about the site's security could also be a factor, though it did not speak to any former users directly.

Rebuilding trust

The latter comment is indicative of a decline in trust on the black market, which can be best observed on message boards. For example, following the initial hack, upset users took to Silk Road's subreddit to discuss their displeasure over the issue, though Vice notes there's been an increase in positive posts from repaid users.

A reddit poll cited by the news source suggests that roughly one-fourth of those who were affected by the hack are still waiting for their lost bitcoins.

However, Defcon told Vice that Silk Road 2.0 hopes to win over these customers soon, saying:

"All of our staff's fee earnings will continue to be invested back into the community until every victim is paid back."

As of now, Defcon projects that all customers will be fully reimbursed by mid-June, though it remains to be seen how many bitcoins will remain unclaimed.

Hidden drugs in vehicle via Shutterstock

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.