A former National Crime Agency officer was sentenced to 5.5 years in prison for stealing 50 Bitcoins, valued at £4.4 million, from evidence related to the Silk Road investigation.
A former National Crime Agency officer has been sentenced to five and a half years in prison for the theft of 50 Bitcoins, which were worth £4.4 million ($5.9 million), from evidence found during a Silk Road investigation. The funds were laundered through multiple transactions over four years using cryptocurrency mixers.
Paul Chowles, 42, was a member of the NCA team that conducted surveillance of organized criminal networks on the dark web marketplace Silk Road and its successor, Silk Road 2.0.
How did he get access to 50 bitcoins?
In April 2019, Thomas White, the co-founder of Silk Road 2.0, was sentenced to 64 months in prison. Chowles, according to a report from CPS, was responsible for analyzing and extracting cryptocurrency from devices seized from him.
In two transactions between May 6 and 7, 2017, Chowles transferred 50 of the 97 Bitcoins seized from White’s “retirement wallet” to public addresses.
The stolen cryptocurrency was subsequently processed through Bitcoin Fog, a mixing service notorious for its ability to obfuscate transaction trails and launder criminal proceeds.
The officer utilized Cryptopay and Wirex debit cards to spend the Bitcoin in pounds sterling over several years.
Between August 2021 and July 2022, he utilized the Cryptopay card to conduct 279 transactions, resulting in a total of £23,309, and the Wirex account to spend £79,885.
Chowles entered a guilty plea to larceny, transferring criminal property, and concealing criminal property at Liverpool Crown Court.
The Crown Prosecution Service determined that he received a financial benefit of £613,147 due to his illicit activities, even though the stolen Bitcoin was only worth £59,409 at the time of theft.
Silk Road Co-Founder Reveals Internal Theft
The larceny went undetected for years because the NCA investigation team initially believed White had personally removed the Bitcoin by accessing his wallet.
Authorities had declared the cryptocurrency to be untraceable by the end of 2021.
White, who had been convicted and was subject to Proceeds of Crime Act proceedings with a confiscation order of £1,560,506, observed the unauthorized transfer and notified the police.
He claimed that only an individual within the NCA could have accessed his cryptocurrency wallet, as they held the private keys.
The NCA sold the remaining 47 Bitcoins to satisfy a portion of White’s confiscation order, resulting in a balance of £1,066,956.
Merseyside Police assumed responsibility for managing White locally after he was released on license in early 2022, having served his custodial sentence.
Officers discovered the stolen Bitcoin during a meeting between Merseyside Police and NCA counterparts to address the White investigation.
The theft was brazenly discussed among law enforcement personnel at this meeting, which Chowles attended.
The Merseyside Police initiated an investigation into the missing cryptocurrency in May 2022 and apprehended Chowles.
Officers discovered an iPhone associated with accounts used for Bitcoin transfers and browser search history related to cryptocurrency exchange services.
Evidence Trail Reveals Systematic Cryptocurrency Laundering
The police discovered numerous notebooks in Chowles’ office that contained statements, passwords, and identifiers associated with White’s cryptocurrency accounts.
The notebooks were evidence of his systematic larceny method and access to the seized digital assets.
Notably, Chainalysis, a blockchain analytics firm, facilitated monitoring funds’ transit through various exchanges and mixing services.
The company’s tools detected converting some of the stolen Bitcoin into cash at exchanges and loading the money onto crypto-enabled debit cards to facilitate spending.
The theft coincided with a more comprehensive examination of government Bitcoin transactions and seizures.
In December 2024, the U.S. Department of Justice was granted permission to dispose of 69,370 Bitcoins, which were confiscated from Silk Road and are estimated to be worth $6.5 billion.
However, President Trump’s administration proposed the creation of a Strategic Bitcoin Reserve as a substitute for the liquidation of seized assets.
After over a decade in prison, Ross Ulbricht, the founder of the original Silk Road, was granted a full presidential pardon in January 2025.
His case was one of the most prominent prosecutions in the history of cryptocurrency, resulting in the processing of over 1.5 million transactions valued at $213 million in Bitcoin.
The Crown Prosecution Service has stated that it will initiate confiscation proceedings against Chowles to recoup the residual financial gain from his criminal activities.