BitDigest April 3 · Issue #629

• Digital currency end a strong 7-day period as alt-coins show their largest jump in months; BTC dominance drops to 62%
• Russia skeptical on positive impact of central bank digital currencies
• Venezuela issuing own COVID-19 assistance packaging providing doctors 1 petro each

This week I watched Deep Web a 2015 documentary on Silk Road, the Darknet marketplace that was seized by the FBI in 2013. Considered the underworld’s version of Amazon, Silk Road was run by the pseudonymous Dread Pirate Roberts (“DRP”). The market site had over 1 million registered users, 10,000 products and is reported to have generated over $1 billion in sales. In the crypto world, Silk Road represents the sale of illicit products the public associates with bitcoin.

I have always been interested in the Silk Road story. It’s a true criminal drama with the anonymity of the dark web marketplace, drugs, death (DRP supposedly hired a hit man to kill a former site moderator and as part of Federal agents investigation, they faked the killing of the individual sharing pictures of the dead man with DRP), theft (federal agents stole confiscated bitcoin from the site) and lots of suspense. In July 2013, Federal Agents intercepted a package containing fake IDs. When they delivered the package to Josh Terrey, a pseudonym used by Ross Ulbricht the pseudonymous DRP, he refused to answer their questions and the agents did not appear to link Terrey to DRP. Several weeks later, on October 2nd, 2013, Ulbricht was arrested while communicating on the Silk Road administrator’s forum from the Glen Park Public Library in San Francisco. The arresting agents were able to seize his operating computer before any attempts to encrypt its data were made.

Ulbricht was charged with money laundering, computer hacking, and conspiracy to traffic narcotics. He was not convicted of selling drugs or any illegal items, nor committing any violent crimes; he was not even charged with paying to have the former site moderator killed. Yet Ulbricht appears to have been held accountable for what others may have done on the site he created. He was given to two life sentences plus forty year without the possibility of parole. Ironically 9 other individuals were convicted with charges related to Silk Road with all 9, including the two federal agents, sentenced to a total 51 years in prison. This makes you question what if Mark Zuckerberg was held accountable for all the actions taken by users on his platform.

I have known a fair amount about this story having previously read American Kingpin by Nick Bilton and Silk Road by Eileen Ormsby, but the movie focuses its narrative on whether DRP was actually only one person (the movie suggests DRP was really 3 different people), how he was identified, and whether his rights under the 4th Amendment were violated. (The 4th Amendments protects people from unlawful searches and seizures.) During the trial, the government never revealed how they identified Ulbricht but it is believed that they were able to covertly access the Silk Road’s overseas servers leading them to the DRP himself. It was a good film but lacked the suspense of the novels.

Last week, Ulbricht celebrated his 36th birthday from jail. He has been imprisoned for over 7 years and expects to spend the remainder of his life behind bars. His family is lobbying for clemency. You can sign a petition supporting Ross on change.org.  

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