What is the ZachXBT $31M Bitcoin trace?
In June 2025, Ross Ulbricht’s Bitcoin wallet received 300 BTC from unknown sources, sparking widespread curiosity about who sent them.
Ulbricht is the infamous founder of the Silk Road, an online black market platform. The darknet marketplace facilitated sales of over 9.5 million Bitcoin (BTC) while operational between 2011 and 2013. Following its shutdown by the FBI, Ulbricht was convicted and sentenced to two life sentences.
However, on Jan. 21, 2025, US President Donald Trump granted Ulbricht a full pardon, and he was released from federal prison. Ulbicht’s subsequent receipt of 300 BTC in June 2025 (worth $31.4 million) immediately drew suspicion and widespread speculation. Social media was flooded with people claiming that funds could be from decade-old Silk Road profits that had been hidden from authorities.
The timing of the donation arrived at an intriguing moment after the 41-year-old Silk Road founder successfully auctioned off his prison memorabilia for $1.8 million. This included his final prison ID card, which fetched 5.5 BTC, more than $550,000!
A lack of evidence for these claims drew the anonymous blockchain investigator ZachXBT to conduct a deeper trace on the source of funds. What initially appeared to either be Ulbricht's personal stash or a generous gift from supporters quickly turned into a complex investigation. ZachXBT had to pierce through multiple layers of obfuscation to expose the origin of the funds from Bitcoin donation flagged wallets.
“It likely doesn’t appear to be a self-donation as people were claiming, though it comes from questionable sources due to the flagged address,” said ZachXBT in a June 2, 2025, X post.
Did you know? When authorities closed down the Silk Road in 2013, they seized over 144,000 BTC. At the time, this was worth around $34 million, but would be valued at over $3 billion in 2025. The founder, Ulbricht, is believed to have made $80 million in transaction commissions from the site.
How did the ZachXBT Bitcoin investigation unfold?
Also dubbed the “Sherlock Holmes of crypto,” ZachXBT’s investigation method required professional-level blockchain analysis tools, including Cielo for crosschain tracking, TRM Labs for transaction graphing and Arkham Intelligence for multichain exploration.
The transparency of public blockchains like Bitcoin means that those seeking anonymity in transactions use sophisticated mixing services like Jambler. Bitcoin mixing service Jambler is a tumbler that enhances the privacy of BTC transactions by pooling coins from multiple users, and mixing them together before redistributing funds. After identifying funds that came through Jambler, the ZachXBT Jambler analysis went deeper as he set about tracing Bitcoin addresses.
Two addresses with compliance red flags emerged: 1Mp5hH, which is linked to exchange activity in 2014, and 1CNDW, which had exchange activity in 2019. Both of these addresses had been dormant until the moment they made large deposits to Jambler in April and May 2025. The timeline aligns with the subsequent Ulbricht donation.
“Few entities regularly use Jambler in size, so I found a potential demix for the donation. 1Mp5hH originates from the late 2014 exchange activity. 1CNDW has 2019 exchange activity and was previously flagged in compliance tools,” shared ZachXBT on X.
The AlphaBay revelation
The full picture wouldn’t become clear until blockchain analytics firm Chainalysis delivered the final piece of the puzzle. It was able to trace the original origin of the funds to the AlphaBay marketplace.
AlphaBay was a successor to Silk Road; the dark web marketplace operated from 2014 to 2017. It actually grew to become 10 times bigger than the Silk Road before it was shut down by the FBI’s ‘Operation Bayonet.’
“We have reasonable grounds to suspect that these funds originated in AlphaBay. Looking at the amount, that would suggest they came from someone who was possibly a vendor on AlphaBay back in the early days,” said Phil Larrat, the Chainalysis director of investigations.
The Chanalysis software tool Reactor flagged the suspicious wallet addresses, which tied them to illicit activity. This led the investigation to determine that it was a donation, not Ulbricht’s own assets, but still suggested the use of illegitimate funds.
The controller of the funds has been linked to trading large quantities on centralized exchanges and using multiple mixers. “That is done typically if you are trying to avoid getting illicit funds frozen,” ZachXBT told Wired.
Did you know? In January 2025, Coinbase director Conor Grogan revealed he had identified 430 Bitcoin worth over $45 million in wallets linked to Ulbricht, inactive for over 13 years and never seized by authorities.
Who is ZachXBT?
ZachXBT is an anonymous crypto investigator who has built an X following approaching 1 million followers. After falling victim to a crypto scam firsthand, they focused on investigating complex blockchain fraud and tracking illegal transactions.
ZachXBT shares work in detailed threads on X and a Telegram channel of over 75 thousand subscribers.
Despite remaining anonymous, their investigations have collaborated with law enforcement and led to the arrest of scammers and the recovery of digital assets. All of which has built a trusted reputation in the cryptocurrency industry.
ZachXBT can dive deep into transaction records using the public blockchain ledger system. This provides the capacity to connect wallets with fraudulent transactions, track money flows and spot suspicious patterns.
Aside from the Ulbricht investigation, ZachXBT has been central to several high-profile cases. This includes exposing a $243 million crypto heist, identifying Chase Senecal, who targeted NFT holders in phishing scams, and calling out influencers like Logan Paul for promoting shady crypto projects.
Did you know? Americans lost over $9 billion to crypto fraud in 2024. This was a 66% increase compared to 2023, and those over 60 were hardest hit at $2.8 billion from 33,000 complaints.
Implications of the ZachXBT crypto tracing
ZachXBT’s work on these cases continues to deliver significant advancements in crypto forensics. It shows how even sophisticated criminals can’t rely on Bitcoin privacy tools
like mixing services to hide their activities.
His involvement in tracing illicit funds, including the recent movement of a long-dormant donation linked to Ulbricht, highlights several critical trends:
- The myth of permanent obfuscation is cracking: Despite the use of privacy-enhancing tools like mixers, peeling chains and obfuscation layers, blockchain’s inherent transparency allows for eventual untangling, particularly with the aid of advanced analytics, crosschain metadata and years of behavioral tracking.
- Dormant funds are not forgotten: The ability to link newly moved BTC to Silk Road-era addresses more than a decade after their initial activity shows that law enforcement and independent researchers must think long-term. Criminal proceeds can lie idle for years, waiting for the moment someone gets careless.
- Forensics is now a multidisciplinary practice: Success in blockchain tracing today relies not just on tracking wallet addresses or watching for token movements. It requires sophisticated clustering, timing analysis, transaction fingerprinting and the use of advanced commercial and open-source forensic tools. Analysts must also interpret intent, habit and human error, not just math.
- A new layer of accountability for the ecosystem: As investigators like ZachXBT reveal what can be done with enough dedication and technical skill, it sets new expectations for platforms, compliance officers and even regulators. The pressure is increasing for crypto services to monitor for red flags, not just check boxes.
Broader implications
ZachXBT’s work is a case study in how decentralized transparency doesn’t mean untraceable. It shows that persistent, well-resourced efforts, whether from independent analysts or federal agencies, can piece together even the most complex trails.
As crypto matures, tracing tools and techniques will only become more powerful. And as cases like this show, the blockchain never forgets, even if its users hope it will.