16 votes

Silk Road, bitcoin drug marketplace, shut down

Reuters article

BBC article

It would seem that time has run out for the Silk Road marketplace. The owner and creator of the site, going by Dread Pirate Roberts, DPR, or Silk Road, has been arrested. Ross William Ulbricht, 29, was the subject of a two year long investigation by the FBI.

Details are in the criminal complaint.

PDF of the criminal complaint



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My sympathies to this man,

But for the love of god, what the hell were his servers, let alone HIM, doing in the United States?

I like when people argue that

I like when people argue that bitcoin is no better than paper money and that the only real money is gold and silver.. Like shiny metals are any better than paper as a valuable item lol.... There is absolutely 0 use for that metal just as there is no use for the paper with dead presidents colored on it. People makes these items valuable and the free market makes it currency.
Maybe in the future we'll be using bottle caps or something else "valuable" :)

Bitcoin, if played correctly,

Bitcoin, if played correctly, could be the means to end the fiat currency ponzi schemes.

It has all the properties of money, such as durability, fungibility, exchangeability except for value as a non-currency good. Silver has excellent value outside as a currency and gold has very little use as a non-currency good but better than bitcoin. So as such gold, silver and bitcoin are excellent candidates for money and should equally be employed as competing currencies.

While the tptb has succeeded in manipulating gold and silver successfully and conditioned the masses to not rely on them as money, they will fail terribly in the case of bitcoin. Bitcoin is already digital to start with, pseudo-anonymity and scarcity and legitimacy are instrinsic to the bitcoin and its protocol.

This will definitely not be the last that we will hear of the bitcoin. As long as a semi-free internet can be maintained, bitcoin will continue to grow stronger.

And now 10 more will show up

And now 10 more will show up in its place... What the feds have done, without realizing it I'm sure, is created a vacuum in the market. Before, no one in their right mind would compete with silk road. Now, there is no competition. It seems as if the feds shot their wad early(not surprising) and wasted their only shot at being able to track these types of transactions. Good job morons. I bet your mommies are proud.

Except

many of the new sites that spring up could be honey pots, funded with the very bitcoins that were seized from the Silk Road. That will enter people's minds for sure.

Does everyone associate every

Does everyone associate every cash drug transaction as cash making that possible?

Cash is used

for many things. Bitcoins are primarily used, at this point in time, for gambling and illicit transactions. It may not be their intended purpose, I wish they were used in many other ways, but it is the reality of the situation. Pretending otherwise is foolish.

I watch alot of youtube

I watch alot of youtube videos concerning bitcoin. From what I hear from investors, programmers and anyone else, illicit transactions are but a minor percentage. Gambling does take up quite a chunk however, but it's nowhere near a majority (which would be >50%). It's the news that's exaggerating the illicit stuff.

I'm quite openminded, so I won't immediately disbelieve you, but I would like to read your source if possible.

Edit: I mean that gambling takes up less than 50% in trading volume, but does take up 50% in transactions. The transactions are quite small however.

It's not easy to track usage

that's part of the point behind it. One interesting thing to note is that BTC tumbled from $140 to $75 over trading today after the news on Silk Road came out.

That's a fairly strong indication to me.

not exactly

btc fell from $140 down to $110 real quick and rallied back to average levels within hours. it's going strong again at $135 right now on the mtgox exchange. on the much smaller btc-e exchange the price went from $124 to $75 and quickly back up again to $119 right now.
btc preformed surprisingly well imo. it's unstoppable.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
Rand Paul 2016

That sucks.. Dude is going to

That sucks.. Dude is going to be in federal prison for the rest of his life.

SteveMT's picture

There will be no Ponzi schemes except those of central bankers.

.... No countries will be allowed to survive if they do not use Petrol Dollars either. Thus saith the banking cartel.
BitCoin Plunges Following US Government Seizure Of Silk Road Website
10-2-13

Earlier today, one of the most popular websites that use and promote the use of BitCoin, Silk Road, was shut down by the US government. As Reuters reports, U.S. law enforcement authorities raided an Internet site that served as a marketplace for illegal drugs, including heroin and cocaine, and arrested its owner, the Federal Bureau of Investigation said on Wednesday.

http://www.zerohedge.com/news/2013-10-02/bitcoin-plunges-fol...

;)

Shouldn't that be "There will be no schemes except those of the central bankers, whether ponzi or not"?

For those interested

in Bitcoin...

Let me clear up a few things. First, is Bitcoin volatile? Yes, absolutely yes. History proves that very easily. That's why people like myself that advocate it warn not to put more in it than you can afford to lose entirely. Gold and silver are far more stable historically than any other form of money the world has seen.

Second, is this the end of Bitcoin? Nope. Not even close. This will only show the free market at work. There will be many people, speculators on Bitcoin, selling, and also many buying. The people selling will have different reasons, among them thinking Bitcoin has suffered a killing hit. The people buying might see other points, like the tremendous news coverage this will bring Bitcoin, which means more attention and probably more interest in the currency. There will probably be 10 new online drug marketplaces springing up within 2 weeks. I can almost guarantee that. It wasn't technology, but instead a human mistake that led to the arrest of Dread Pirate Roberts. Just some info.

Thanks.

I look at bitcoin as a reusable postage stamp for international semi private electronic transactions, not a store of value.

Free includes debt-free!

Yes

It's important to realize bitcoins can have value, and be used as a transactional currency, without needing to be the best store of value (which is gold IMO). As long as Bitcoins are scarce, and they are, then they can maintain free market value.

Here comes the bitcoin crash

$140 to $117 so far, still falling fast.

BTC chart

Working chart:

Crash where: Priced in money, not much change.

http://pricedingold.com/bitcoin/

Free includes debt-free!

Sorry, this chart not updated with today's news.

-

Free includes debt-free!

.

This has been a joint operation run the cybercrime squad within the FBI's New York field office. It involved the FBI, DEA, IRS and Homeland Security's investigative unit.
---
It's unstated from when the investigation started, but they received a complete copy of the Silk Road web server on the 23rd of July 2013. This was all done under the Mutual Legal Assistance Treaty, which implies that they had access to current site information up until the point they shut the site down.
This included user account and transaction information. It's unclear whether or not this covers addresses and other sensitive transaction information.
**This also apparently covers at least 60 days worth of messages from the period where the site was copied.
From February 6, 2011 to July 23 2013, 9,519,664BTC was generated in sales, 614,305BTC going directly to DPR in the way of "commissions". This comes to a total of 1,229,465 transactions.
Based on the copy of the site which the FBI received, they believe DPR to have been the sole operator and owner of SR, handling all aspects of the site himself and delegating only user affairs to appointed moderators.
---
In March of this year, a SR user/vendor called "FriendlyChemist" attempted to extort DPR via SR's private message system, providing proof that he had the names/addresses of thousands of vendors/users after having allegedly hacked a bigger vendor. He demanded $500,000USD, saying that he needed the money to pay off his supplier. DPR then stated that he wished to speak to FriendlyChemist's supplier.
A user called "redandwhite" then proceeded to contact DPR, stating that he was FriendlyChemist's supplier and also the owner of his debt. DPR then solicited redandwhite to "execute" FriendlyChemist, supplying redandwhite his full name and address. After having agreed on terms, DPR sent redandwhite approximately $150,000USD (1,670BTC) to have FriendlyChemist killed. redandwhite later provided photographic proof of the alleged murder.
Investigators could not find any record of somebody in that region being killed around that date or matching that description. This possibly implies that DPR was duped/scammed, but, DPR is also quoted as having told redandwhite the following: "Not long ago, I had a clean hit done for 80k."
---
DPR has been identified as Ross William Ulbricht.
> "He is 29 years old, graduated from the University of Texas with a Bachelor of Science degree in Physics in 2006. From 2006 to 2010, he attended graduate school at the University of Pennsylvania School of Materials Science and Engineering."
His LinkedIn profile is at: http://www.linkedin.com/in/rossulbricht[2]

Now, onto how he got caught...

An agent involved in the investigation ("Agent-1"), found the first few references to SR on the internet from somebody only identified as "altoid", attempting to promote the site in its beginning days, in January of 2011.
In October of the same year, a user also going by the name of "altoid" made a posting on Bitcoin Talk titled "a venture backed Bitcoin startup company", which directed interested users to "rossulbricht at gmail dot com".
That email address is what led to DPR's downfall.
---
After identifying "altoid", they started connecting the "DPR" identity to Ulbricht pretty quickly.
Ulbricht's Google+ page and YouTube profile both make multiple references to the a website dubbed the "Mises Institute". DPR's signature on the SR forums contained a link to the Mises Institute.
DPR cited the "Austrian Economic theory" along with the works of Ludwig von Mises and Murray Rothbard, all of which are closesly associated with the Mises Institute.
Server logs show that someone logged onto the SR administration panel from San Fransisco around the same time that Ulbricht was staying in San Fransisco.
Multiple fake IDs were intercepted by U.S. Customs & Border Patrol while on their way to an address which Ulbricht was living at the time. These IDs all carried photos of Ulbricht but had false names and details. This was around the same time that DPR stated in a message that he was acquiring some fake IDs to buy new servers.
When questioned by Homeland Security about the fake IDs, he refused to answer any questions but then stated that anyone could purchase such things using "Silk Road" and "Tor".
The address which Ulbricht was staying at was being rented in cash and he was living with housemates who knew him under a name which corresponded with one of the fake IDs.

What are the odds that the whole thing was a sting?

Was Silk Road real?

Free includes debt-free!

it wasnt so much as a sting

it wasnt so much as a sting as it was shooting fish in a barrel.

Silk Road

was likely not a honey pot. Atlantis is assumed to have been a DEA/FBI/NSA sting of that type, though.

Thanks beer.

Honey pot is what I was thinking.

Free includes debt-free!

No problem

.

Just because the regulators claim something is it true, is it?

Is this a downvote from someone with first hand experience?

That is a rhetorical question. The NSA is snooping.

Free includes debt-free!

Uh, YES.

Is the Daily Paul real?

I post here, and dialogue with you.

I have first hand knowledge.

I have news reports and reports of government officials.

Why would the founder of the Silk Road be doing post-grad work studying Materials Science? For fun, for cover?

So I formulated my silly question.

Free includes debt-free!

This is unbelievably shitty news.

Word is that he got caught from one email sent 3 years ago in the first days of Silk Road.