Silk Road Admin and former Austinite arrested by Feds

Laziness did him in. A trail to a personal gmail account? Brilliant. How did he not realize he would have to start from scratch at each stage of development? Kidz...

 

I familiar with bitcoins according to these explanations. But I'm still not sure how they work. Why do people care about them? Doesn't make sense.

 

Do you mean from a programming perspective? If so then watch this long video: http://www.youtube.com/watch?v=Lx9zgZCMqXE

If you want non-computer science explanation then watch this 2 minute video: http://www.youtube.com/watch?v=Um63OQz3bjo

for many reasons. ill list 3 big ones

a) no regulatory body. There is no person randomly deciding to print money therefore devaluing the currency (**** Bernanke).

b) no personal information associated with an account. The government can not know how much you have unless you tell them, making it impossible for them to tax on what you have.

c) no third party needed for storage or transportation. You do not need a bank to hold your money since it is digital. Transferring trillions can be done without a bank as well. This is also useful for avoiding the government as the government likes to regulate banks.

 

They're popular because they're not "fiat currency", which means that in lolbertarian world, while those dollars in your wallet are worthless fiat money, bitcoins will have their value saved for...some reason. Meanwhile, bitcoins are harder to trace than dollars, which makes their utility to criminals obvious.

 

There were at one point two other sites that I was aware of that were competing with Silk Road. I don't care enough to check, but I assume they are still in business.

 

How long before someone starts floating a script for a movie on this? I mean, they already have a movie on the Wikileaks guy.

 

is there any sort of FDIC comparable on there, or do users risk losing the bitcoins should this go under for some reason?

 

I still don't get it... I have no clue how this works. Sounds like a Chucky Cheese type thing.

 

Its also one of the most unstable currencies around. Its no different from owning penny stocks other than you don't pay taxes on them (and obviously you don't hold shares in a company). It plays like a penny stock.

 

I wholeheartedly REJECT the OP's suggestion that I knew the perp, but he was arrested not too far from my house.

Here's an amazing article from the New York Times on this case. Just completely bizarre and amazing, with roots in Austin, TX:
http://www.nytimes.com/2014/01/19/business/eagle-scout-idealist-drug-trafficker.html?_r=0

 

I found out my oldest nephew (who you know) got a extremely high quality fake ID from Silk Road. I was quite proud at first, then scared ****less - lol.

 

That's addressed in the new article -- the other versions keep flaming out due to incompetence or the temptation to take the bitcoins and run.

 

Wow that was an awesome read. Thank you

Besides the accusations of murder-for-hire, I am fascinated with what he did.

 

amazing article. good find.

 

I just amazed that someone so smart could be so stupid at the same time. Greed and power skew your .

He had $80 million in Bitcoin at the time, which would be at over $200 million today I believe... just shut it down and leave, or sell it and call it a day. Don't go all Tony Montana and start offing guys - and sure as crap don't stay in America.

 

If he really is the D.P.R. he had a pretty good cover. It talks about how he just rented a room in a group home. it's not like he was living large.

This group tech home thing is actually big with the 20-somethings here in town. I really don't get it -- I mean, at all -- but it's pretty popular for the tech 1%. If they're going to spend all their time either online or at work (via the Google bus or some such), why would they want to spend any money on their lodgings? Or something like that?

Maintaining that college vibe, or something? Wouldn't be for me, but it's fascinating.

 

http://www.mercurynews.com/crime-courts/ci_27459056/s-f-man-convicted-running-silk-road-underground

[RQUOTer]
Silk Road: S.F. man convicted of running underground drug website

By Larry Neumeister and Tom Hays Associated Press

Wednesday, Feb. 4, 2015 - 3:29 p.m.

NEW YORK -- A San Francisco man was swiftly convicted Wednesday of creating and operating an underground website that prosecutors said enabled drug dealers around the world to reach customers they would never find on the street.

Ross William Ulbricht was convicted of seven drug and conspiracy counts. The jury's verdict in federal court in Manhattan came after little more than three hours of deliberations and one day after prosecutors urged jurors to follow Ulbricht's "digital fingerprints."

The government said drug dealing made up nearly all of Silk Road's sales during its nearly three years in business, which ended with Ulbricht's October 2013 arrest. Prosecutors also discounted defense claims that Ulbricht was framed by others in a murky Internet world where nothing is what it seems.

Prosecutors said Ulbricht enabled more than 1 million drug deals on Silk Road and earned about $18 million in bitcoins. Sales of illegal drugs of every type were delivered through the website, representing at least $180 million in sales, they said.

Ulbricht had several supporters among the spectators. When the verdict was announced, his father dropped his head in his hands. Later, a male spectator shouted out, "Ross is a hero!" Another called out to him: "It's not over Ross. We love you." As Ulbricht was led out of court, he waved toward the spectator section.

Lyn Ulbricht, his mother, exited the courtroom complaining that the defense had been barred from putting on evidence that would help her son.

"It was not a fair trial. It was not an even playing field, and I think that's a tragedy," she said.

U.S. Attorney Preet Bharara said the conviction "should send a clear message to anyone else attempting to operate an online criminal enterprise. The supposed anonymity of the dark web is not a protective shield from arrest and prosecution."

The government said the fallacy of Ulbricht's promise of anonymity in the dark corners of the Internet as a reason for customers to peddle their illegal merchandise online was exposed by numerous trial witnesses, including the first: Homeland Security Agent Jared Der-Yeghiayan.

He testified that shipments originating on the website first came to his attention in June 2011 when X-rays and canine detection dogs at Chicago's O'Hare Airport turned up envelopes from the Netherlands containing Ecstasy pills wrapped in vacuum seal and foil. Soon, the drugs were being sent through many countries.

By late September, Der-Yeghiayan said he learned about Silk Road and began infiltrating it, taking over staff member accounts each time one was arrested or agreed to cooperate.

The agent testified that the website's online boss went by the alias Dread Pirate Roberts, a reference to the swashbuckling character in "The Princess Bride," and prosecutors presented numerous instant message conversations involving a person using that persona.

Defense attorney Joshua Dratel insisted evidence proved Ulbricht was not Dread Pirate Roberts.

But Der-Yeghiayan said he was the agent who was communicating online with Ulbricht when he was arrested while sitting at his computer at San Francisco's Glen Park Library. Agents, he said, were instructed to snatch the laptop before arresting Ulbricht.

On it, he said, they discovered that Ulbricht was signed in as Dread Pirate Roberts and was immersed in a chat with Der-Yeghiayan.

During closing arguments Tuesday, Dratel said his client quit Silk Road soon after creating it to sell anything on the Internet and before the website was overrun by drug dealers.

But Assistant U.S. Attorney Serrin Turner said Ulbricht operated the site from beginning to end and was willing to do anything to protect it. He cited emails that he said showed Ulbricht was willing to spend hundreds of thousands of dollars to kill as many as five people he thought were threats to his operation.

Ulbricht faced no murder charges in New York, but still awaits trial in Baltimore in a murder-to-hire plot.

His sentencing in New York is scheduled for May 15, and some of the charges carry a maximum of life in prison.
[/rquoter]

Nice try with the defense, including another man to blame, but I guess there wasn't any real chance. Symbolic, though. Multiple other markets are supposedly doing better than Silk Road did.