Categories: Bitcoin Entertainment

Accused Silk Road creator goes to trial amid U.S. scrutiny of bitcoin

Click here to view original web page at www.reuters.com

NEW YORK (Reuters) - A U.S. crackdown on use of the digital currency bitcoin for drug trafficking and other crimes is headed for its highest-profile test yet, as a trial begins for the alleged creator of an online marketplace catering to vice.

Jury selection is scheduled for Tuesday in Manhattan federal court in the case of Ross Ulbricht, who authorities say created Silk Road, an online black market where drugs and others illegal goods could be bought anonymously using bitcoins.

The trial, expected to run for up to six weeks, will cast a spotlight on the dark side of virtual currencies and so-called Darknet markets where illicit goods can be secretly bought.

Ulbricht, 30, has never conceded creating Silk Road and has pleaded not guilty to seven counts including operating a continuing criminal enterprise and conspiracy to commit narcotics trafficking.

Prosecutors say Ulbricht took extreme steps to protect Silk Road, soliciting the murder of six people who posed a threat. No evidence exists the murders were carried out.

The former Eagle Scout faces up to life in prison if convicted. His supporters include bitcoin enthusiasts and libertarians, who call the case an attack on Internet freedom.

"It's not just about one man and one family, but it's something that will impact law going into the 21st Century," Lyn Ulbricht, his mother, told a libertarian gathering in June.

Joshua Dratel, his lawyer, declined comment.

'ECONOMIC SIMULATION'

Silk Road operated from at least January 2011 to October 2013, authorities say, generating sales of $1.2 billion and commissions of $80 million by the time the FBI seized it and arrested Ulbricht.

Prosecutors say Ulbricht ran it as the "Dread Pirate Roberts," an alias borrowed from a character in the 1987 movie "The Princess Bride." The website relied on the so-called Tor network, which lets users communicate anonymously.

The website was created after Ulbricht, a Texas native with a bachelor's degree in physics, left graduate studies at the Pennsylvania State University in 2010.

On LinkedIn, Ulbricht wrote that his goals had "shifted" and he was now "creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force."

Prosecutors say the "economic simulation" was Silk Road, which made him rich: From his laptop, the government seized 144,336 bitcoins that on Friday were worth $41.2 million.

While Ulbricht was charged in a separate case in Maryland over an alleged murder-for-hire plot, the New York indictment does not have substantive charges regarding them. U.S. District Judge Katherine Forrest, who is presiding over the case in Manhattan court, has said she will allow prosecutors to present evidence on allegations Ulbricht ordered killings to defend his business.

NEW MARKETS

While Silk Road's takedown marked a high point in efforts to disrupt illegal Darknet market activity, law enforcement continues to wrestle with it.

Similar websites have since emerged, and by December they had 78 percent more drug listings since Silk Road's seizure, according to Internet safety nonprofit Digital Citizens Alliance.

Among the new websites was one under Silk Road's name, leading to charges in November against alleged creator Blake Benthall amid a broader U.S. and European seizure of dozens of websites.

Even then, the bust did not shutter larger websites like Evolution, which unlike Silk Road also sells weapons and stolen credit cards, the Digital Citizens Alliance says.

Manhattan U.S. Attorney Preet Bharara, whose office is prosecuting Ulbricht, compared it to "a game of Whac-A-Mole" but said that did not mean giving up.

"The best way to go about it is to keep at it," he said. "Ultimately you have the deterrent effect, because people realize, 'We can't change our ops enough not to get caught.'"

(Reporting by Nate Raymond in New York; Additional reporting by Aruna Viswanatha in Washington; Editing by Noeleen Walder, David Ingram and Andrew Hay)

Jury selection is scheduled for Tuesday in Manhattan federal court in the case of Ross Ulbricht, who authorities say created Silk Road, an online black market where drugs and others illegal goods could […]

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama
Tags: carone

Recent Posts

$10K Bitcoin Stronger Than Ever But No One Seems to Care: Google Trends

Risk Disclaimer - By using this web site you agree to its terms and conditions. All materials, including but not… Read More

5 hours ago

Bitcoin Is A Hedge Against Gov’t “Fiscal Irresponsibility”, Analyst

Equities portfolio manager turned crypto fund executive Travis Kling has argued that Bitcoin has come into its own as a… Read More

5 hours ago

Why Are France & Germany Blocking Facebook’s Crypto? The Euro, Apparently

For those most part, governments have ignored Bitcoin . While the crypto asset’s proponents see it as the future of… Read More

5 hours ago

U.S. Charges JPMorgan Suits for ‘Spoofing’ Precious Metals Markets

| Source: Lorimer Images/Shutterstock The United States Department of Justice has charged three gold and precious metals traders from JPMorgan… Read More

5 hours ago

Your Crypto Exchange Can’t Send Even $1000 Without Exposing You

Regulator-compliant crypto exchanges are required to share your information with other financial institutions. | Source: Horth Rasur/Shutterstock Transferring more than… Read More

5 hours ago

Bigger Bloodbath in U.S. Stock Market Likely: Factors of Further Downtrend

Geopolitical risks and an uncooperative Fed could trigger a short-term relapse in stock prices. | Image: Shutterstock The U.S. stock… Read More

5 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More