After several years of uncertainty, the United States government has finally claimed the $48 million in funds earned from the Silk Road, a notorious online drug marketplace whose operations were terminated in 2013.
ANNOUNCEMENT: Silk Road is BACK ONLINE NOW as Silk Road 3.1 and open for business. The team did a change and upgrade for a reason we can only assume for security.
In the successful government raid of the market, the authorities seized 144,336 Bitcoins, all which were auctioned off in 2014 and 2015.
The delay in receiving these auction proceeds came courtesy of numerous lawsuits from none other than Ross Ulbricht, the initial operator of the Silk Road online platform that sought to contest the legitimacy of seizing the units.
Nonetheless, Ulbricht has subsequently decided not to proceed with his claims, which therefore means that the U.S. government, through its Department of Justice, is now $48 million “richer.”
The Silk Road Takedown
Silk Road was a dark web marketplace which served as a hub for anonymous transactions for numerous forms of illegal activities and products, particularly narcotics.
Ross Ulbricht, who was then the principal figure associated with the operations of the Silk Road, disguised himself as the moniker of the “Dread Pirate Roberts,” a character adapted from the film The Princess Bride.
The site started off as a typically anonymous venture, which mandated for word-of-mouth communications to gain access.
Even so, this site grew in popularity with Ulbricht accepting an interview by Forbes. Eventually, the site caught the attention of authorities who later on brought down the famed platform together with its original operator, the Dread Pirate Roberts.
In 2015, Ulbricht was sentenced to life imprisonment after the jury convicted him of charges of hacking, money laundering and illicit drug trafficking.
He recently withdrew his lawsuit seeking to bar the U.S. government from not only selling the cryptocurrency for cash but also forfeiting the resulting funds to satisfy their legal suits against him.
Paul Grant, the attorney to Ulbricht, confirmed that the U.S. Department of Justice would allocate the funds for general use—an act that he referred to as “sad for justice.”
In May of this year, a life sentence and jury conviction against Ulbricht was upheld by the Second Circuit court after he had challenged the ruling.
His decision to appeal the conviction was motivated by the fact that his prosecutors had conducted unlawful electronic searches to make a case against him, not to mention the fact that purportedly corrupt federal agents had attempted to draw on the investigation to disguise their intentions of extorting cryptocurrency units.
Grant later confirmed that he and his client were exploring legal means to overturn both the sentence and conviction.
As per the prosecutors’ claims, Ulbricht launched the Silk Road back in 2011, then permitting users to buy computer hacking software, illegal drugs and other illicit products.
Before officers brought its operations to an end in October 2013, the site used an exclusive Bitcoin payment system to carry out the transactions, a factor that ensured customers’ identities remained anonymous.
By the time the authorities burst its operations, numerous individuals had succumbed to drug overdose courtesy of the narcotics purchased from this site.
Prosecutors later tied these deaths to Ulbricht, who had evaded the authorities innumerable times under the codename “Dread Pirate Roberts” and later ditched the play and sympathized with the victims.
Still, authorities were able to tie him to another serious crime as well.
It was stated that he had tried to petition murder-for-hire cases against his blackmailer, among other enemies, at a total cost of $730,000.
The operation did bear fruit when the Federal Bureau of Investigations was able to track him down through assessing several forged identification documents in various packages originating in Canada and heading to a similar address back in San Francisco, California.
The Silk Road was subsequently shut down (although other versions later cropped up) and the suspect, Ross Ulbricht, was consequently sentenced to a life imprisonment without any possibility of parole for charges of conspiracy to trafficking narcotics, computer hacking, and money laundering.
Timing is Ever Crucial
Finally, and this is where most Bitcoin holders will incessantly lament, by selling the 144,336 units at $334 for each in 2014 and 2015, the U.S. government has pocketed $48 million.
Surprisingly, had they waited until just after Ulbricht had finally dropped his legal claim about the unlawful seizure, the headlines would now be reading “U.S. Government Claims $630 million” for those same units.
Nevertheless, there is little information on exactly where this $48 million bankroll will go.
While federal agencies such as the Internal Revenue Service (IRS), the FBI or even the Department of Treasury might be the potential benefactors, it is only best to assume that this money will not be put to proper use since the federal government is never really one for financial responsibility when it comes to cryptocurrencies.