The Party is Over. Silk Road Bitcoin Drug Marketplace Seized, Owner Arrested

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“Yes. The party is over.” — Reddit thread on the fall of Silk Road

In the early days of Bitcoin, the alternative digital currency was sometimes synonymous with buying and selling illicit drugs online. The most famous source for anonymous drug trafficking was a site called Silk Road, an anonymous eBay-like marketplace.

Well, no more.

Silk Road has been seized by federal authorities, and its operator has been arrested and identified as Ross William Ulbricht. Mr. Ulbright, 29 years old, is a native of Texas and lists himself as an Investment Adviser and Entrepreneur on LinkedIn.

Ross William Ulbricht Silk Road

Ulbricht’s LinkedIn profile reads:

Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and agression amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.

Ulbricht operated Silk Road under the name “Dread Pirate Roberts”, or “DPR”, a reference to a fictional character in the 1987 film The Princess Bride.

He provided interviews anonymously, such as his interview with Forbes last month.

“We can’t stay silent forever. We have an important message, and the time is ripe for the world to hear it,” says Roberts. “What we’re doing isn’t about scoring drugs or ‘sticking it to the man.’ It’s about standing up for our rights as human beings and refusing to submit when we’ve done no wrong.”

Silk Road Got Big Fast, But Crumbled

Silk Road had been active for over 2 years. In that time, roughly 9.5 million Bitcoins had changed hands, which amounts to roughly $1.2 billion in sales and $80 million in commissions for the site.

The majority of transactions on Silk Road were for illicit drugs, from LCD to heroin to methamphetamine to cocaine. Users also traded prescription medications, weapons, and hacking software.

Bitcoin DEA Seizure

Soon enough, problems seemed to spring up.

In March 2013, it is alleged that Ulbricht ordered a hit on one of his users named FriendlyChemist who was blackmailing DPR and threatening to release information about users of Silk Road. DPR wrote, “In my eyes, FriendlyChemist is a liability and I wouldn’t mind if he was executed,” providing personal information about the user including that he lived with a wife and three children, and offering to pay 1,670 Bitcoin, or $150,000, for the job.

In July of this year, the DEA seized Bitcoin from Eric Daniel Hughes who had violated the Controlled Substances Act. It was theorized that he was lured by the DEA into a honeypot account on Silk Road.

Eventually, Ulbricht’s online life caught up with him. He had public Google+ and LinkedIn accounts, but was trying to lead a private life as a drug kingpin with alternate identification.

Below is the full list of criminal charges against Ulbricht.


How Will Silk Road and DPR Live On?

Just as the legend of “Heisenberg” will forever live on in the hit TV series Breaking Bad, perhaps Ulbricht’s infamy will have a lasting legacy. As evidence, there is already a Facebook fan page for Mr. Ulbricht, launched earlier today upon his arrest.

Silk Road users and supporters are already scrambling on forum sites like Reddit. Some are concerned about their own safety while others are looking for alternative sites to Silk Road.

One thread reads:

I know many of you are freaking out. If this turns out to be true this is the end of the road as we know it.
Most likely customers have nothing to worry about. We have to have faith that all incriminating evidence is kept highly encrypted. However, regardless, you wont be busted for your small amounts of stuff. I hope you used pgp as everyone has been telling you.
Vendors. Time to clean house. Delete anything incriminating you may have now. We trusted you with our information, now make sure it’s gone.
Yes. The party is over. However, the only consequences for 99.9 percent of us will be having to look harder for stuff.
Stay safe.

Some are just reminiscing about how much their Bitcoin would be worth if they had not spent it on Silk Road. “Honestly, if we didn’t spend money on there or if there was no silk road bitcoins would not be worth what they are today,” said one user. “Yep, people don’t realize that it’s the movement of bitcoins that increased their value,” replied another. “i wouldn’t even have bought the bitcoins if it werent for sr anyway,” added a third.

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10 Responses to The Party is Over. Silk Road Bitcoin Drug Marketplace Seized, Owner Arrested

  1. […] past week, notorious Bitcoin marketplace Silk Road was seized by federal authorities and its operator was arrested for running a massive drug marketplace that has generated $1.2 […]

  2. […] big news this last week was the takedown of drug marketplace Silk Road and arrest of its operater Ross William […]

  3. […] or the Dread Pirate Roberts, as he was known to the Silk Road community, was arrested in San Francisco last week by federal authorities. Silk Road was a Bitcoin marketplace used primarily for buying […]

  4. […] the recent Silk Road bust that is still making heads spin at the magnitude of the illicit business operated on the Bitcoin […]

  5. […] Read our full coverage of the Silk Road seizure and Ulbricht’s arrest […]

  6. […] the next tech mogul to be profiled may be the Dread Pirate Roberts, or Ross William Ulbricht, the recently arrested founder of Bitcoin drug marketplace Silk […]

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