Dark Web Drug Dealer Indicted for Laundering $137 Million in BTC From Prison
2 min read
A dark web drug dealer from Maryland known as Xanaxman is accused by a Maryland federal court of laundering $137 million worth of BTC from prison.
Xanaxman, real name Ryan Farace, was imprisoned three years ago for selling Alprazolam, a form of strong anxiety drug Xanax, on dark web markets.
In November 2018, the court ordered Farace to forfeit 4,000 BTC earned from selling drugs. That much BTC was worth $16,800 then but would be worth $187.2 million today. He was also ordered to hand in $5.6 million in cash and property.
But Farace continued money laundering while serving a 57-month prison sentence, according to the federal indictment, which the court unsealed on Wednesday.
The indictment alleges that Farace, aided by his father Joseph Farace, laundered drug proceeds between October 2019 and April 2021.
In connection with these allegations, the Drug Enforcement Administration seized 2,875 BTC in February and another batch of 59 BTC in May. Today, that BTC would be worth $137 million.
While the indictment refers to proceeds derived from drug dealings, it isn’t clear whether these were BTC holdings the government hadn’t previously known about or BTC he somehow acquired while in prison.
Dark web and crypto
Reliable data about the dark web, let alone the use of crypto on the dark web, is difficult to obtain. In one attempt, blockchain analytics firm Chainalysis estimated that over $800 million in cryptocurrencies was sent to dark web markets in 2019.
The Silk Road, a marketplace popular for buying illicit drugs on the dark web, was forced to shut down by the FBI in 2013. The agency seized 173,991 BTC (worth $33.6 million at the time), but there’s still 444,000 BTC missing; 70,000 BTC that mysteriously moved in November 2020, was part of that batch, according to blockchain analytics firm Elliptic.
The US government auctions seized BTC, often at a premium. In 2014, venture capitalist Tim Draper acquired 30,000 BTC confiscated from the Silk Road at an undisclosed price.
Farace’s BTC has yet to hit the market.
