Despite great efforts to remain anonymous, the owner of the controversial Tor-enabled drug marketplace: Silk Road has been identified, according to the FBI.
29-year old Ross Ulbricht, living in San Francisco, is the alleged owner of Silk Road, operating under the pseudonym Dread Pirate Roberts (DPR). Since his apparent arrest, the Silk Road website has been shut down, showing instead a short paragraph to that effect and listing five US government agencies. According to the FBI, the world finally gets a look at the Silk Road books. The result: Over US $1.2B worth of turnover at a profit of almost US $80M.
The lynch-pin of the investigation turns out to be an oversight by Ulbricht, who posted thinly-veiled Silk Road marketing messages on two separate forums, but then later solicited unrelated IT help on another forum whilst listing his real email address as a contact point, using the same username “altoid.” Once Ulbricht appeared on investigators’ radar, it was only a matter of due diligence to make multiple connections between him and Silk Road.
The arrest brings with it both practical and philosophical implications. To his detractors, Dread Pirate Roberts was known as a modern-day cyber hooligan, overseeing his drug empire under the cowardly cloak of anonymity. But he had his fans too. Stating explicitly at one point that he was striving to accomplish two goals: 1) To remove the violence from drug purchases, and 2) To reduce the risk of purchasing drugs of questionable quality, DPR may have in fact made inroads towards his ideals. By anonymizing buyers and sellers, it is conceivable that drug-related violence was reduced among Silk Road users. In addition, by using an Amazon-like vendor rating system, buyers were able to purchase illicit drugs with high confidence that they were of high purity.
DPR was as well known for his roll as the leader of Silk Road as he was for his idealistic prose. In his lengthy posts, he extolled the moral virtues of a free society, often lauding his customers as brothers in arms. He was known as a pacifist and a dreamer.
But the recent FBI warrant paints a far darker picture of Ulbricht, after allegedly accessing a series of private messages in which he solicits the murder of a Silk Road user who was blackmailing DPR. According to the documents retrieved, an assassination was carried out in Canada for US $150,000 equivalent – a premium over the last “hit” that DPR ordered which was for only $80,000. However, this accusation has not been fully corroborated, as there were no reported murders at the time and place mentioned. If these allegations are true, it will assuredly change the opinions of DPR’s followers. In the meantime, we have only the warrant document as evidence and will have to wait to see if the charges are corroborated or refuted.
A commonly debated topic among Bitcoiners is how their favorite crypto-currency is related to Silk Road. How much of the daily Bitcoin transaction volume is drug purchases? Without Silk Road, would the Bitcoin value be much lower? Maybe without the stigma of Silk Road the value would actually be much higher? Bitcoiners posting to the Bitcoin sub-reddit forum differ on their reactions. Some feel that DPR’s arrest is a good thing for Bitcoin, while others believe that he was doing the world a valuable service. Will the shuttering of Silk Road have a positive, negative, or even neutral effect on the price of Bitcoin? At least in the short-term, the price has plummeted over 30% in the last hour (the BitStamp price went from ~$125 to ~$90). Are Silk Road users dumping their Bitcoin as fast as they can? Or is this just speculative selling? Only time will tell just how important, or insignificant, that Silk Road was to the value of Bitcoin.
A great implication to consider: If the US government successfully seized the Silk Road Bitcoin stash, then it may now be one of the largest holders of Bitcoin in the world.