What Will Happen to Bitcoins Seized from Silk Road and Ross Ulbricht?

 

Since its quiet inception in 2011, the “hidden” website known as Silk Road kept a low profile on the so-called Deep Web. The site’s preference for stealth over visibility, while unusual, makes sense when you consider the Silk Road business model: it was only an illegal drug trafficking marketplace, after all. Now, after 2+ years of operating under the radar, the site has been closed by the FBI, and Silk Road’s creator — 29-year-old Ross Ulbricht of San Francisco — has been placed under arrest.

Criminal In Handcuffs

 The Silk Road: a (Formerly) Booming Business

If you’re imagining a disgruntled teenager paving the digital path for a few small-time drug sales from a computer in his mother’s basement, you have entirely the wrong idea. Silk Road was not the obscure side-project of somebody who happened to fiddle with computers in his spare time. It was a thoroughly encrypted, densely populated international ecosystem, sustained by its own abstract currency, the bitcoin. And to say “sustained,” perhaps, is putting it lightly: it might be more accurate to say the Silk Road was positively flourishing.

During the site’s brief run, between its approximately one million users — collectively contributing up to 60,000 hits per day — the Silk Road took in 9.5 million bitcoins, plus a hefty commission of 600,000 bitcoins for its progenitor. Bitcoin monetary value has a tendency to fluctuate dramatically, which has resulted in a likewise dramatic range of dollar-conversion estimates. But to put Silk Road’s massive bitcoin harvest in more familiar terms, the site ultimately generated profits estimated between 60 million — at the “low” end — and over a billion dollars; not to mention a cool 80 million for himself.

Decorative Scales Of Justice In The Courtroom

What Will Happen to Ulbricht’s Bitcoins?

Unfortunately for Ulbricht, the days of wine and roses (and heroin… and meth… and cocaine…) seem to be over. At quarter past three in the afternoon on Tuesday, October 1st, the FBI arrested Ulbricht at a San Francisco public library on a hefty triple-charge of computer hacking, money laundering, and narcotics trafficking. The website itself was promptly seized by the Department of Justice, along with 3.5 to 4 million dollars’ worth of bitcoins.

But for the rivers of money flowing around him, Ulbricht is facing his daunting criminal allegations not with an expensive private attorney, but with a federally appointed public defender, Brandon LeBlanc. After all, illegally-made money is hardly a viable payment option during court proceedings. At the same time, bitcoins are not a federally recognized currency — you can’t go to your local 711 and pay for a slushie in bitcoins, you need to fork over dollars.

The FBI itself admits to being thrown slightly off-balance by the lack of a precedent when it comes to the handling Ulbricht’s strange virtual currency. As an FBI spokesperson confessed to Forbes, “This is kind of new to us.” For the time being, the FBI has tentative plans to keep the bitcoins in digital storage, and will “probably just liquidate them” at the conclusion of the trial. Will the bitcoins be written off and forgotten about? Auctioned off? Converted into a more familiar currency? As long as the FBI itself remains uncertain, the public will simply have to wait and find out.

If you or somebody you know is facing criminal charges, contact the offices of Young, Marr & Associates today.

HOW WE CAN HELP

DUI DEFENSE

icon car - Criminal Defense
DUI INFORMATION CENTER

Learn what to do if you have been stopped for DUI/DWI.

icon car - Criminal Defense
ARD IN PENNSYLVANIA

If this is your first DUI offense, you may be eligible for ARD.

RESULTS

NO JAIL TIME

Commonwealth v. "H" (DUI case)

Client was charged with three separate DUI cases calling for mandatory minimum imprisonment of 90 days on each case. Client was advised to seek immediate intensive alcohol counseling. Client was sentenced to 1 year of house arrest after serving 3 days in the county prison.

CASE DISMISSED

Commonwealth v. "C" (Felony drug/Firearms case)

Client was charged with felony Delivery of drugs and illegal gun possession and was facing a mandatory 3-6 year prison sentence in the State prison system. Client was sentenced to one year of house arrest.

CASE DISMISSED

Commonwealth v. "S"

Client was charged with simple assault, domestic. After a hearing where evidence and testimony was presented, the entire case was dismissed by Judge Leonard Brown.

CASE DISMISSED

State of New Jersey v. "H"

Charges for young man charged with second degree aggravated assault were downgraded to third degree and he was accepted into the County Pretrial Intervention program with charges to be dismissed and record expunged after one year of misconduct free behavior.

OUR CRIMINAL DEFENSE TEAM INCLUDES TWO FORMER DISTRICT ATTORNEYS

We have decades of experience dealing with local police departments, prosecutors, and judges throughout southeastern Pennsylvania and New Jersey.

Anyone facing charges involving a criminal offense can expect to experience a heightened degree of emotional turmoil, for themselves, as well as their family members. Our team of highly qualified criminal law attorneys and expert legal support staff are committed to providing each of our client’s with the compassion and understanding they deserve, as well as an aggressive plan for representation at an affordable price.

As former prosecutors, we have a balanced and in-depth understanding of the criminal justice system and how the prosecution prepares cases. In addition, we have long-standing experience dealing with local police departments, prosecutors and judges throughout southeastern Pennsylvania and New Jersey.

At Young, Marr and Associates, when we say “experience matters,” we mean it. Our lawyers, which include two former prosecutors and a former senior deputy district attorney bring more than three decades of criminal law experience, handling more than 10,000 criminal cases. It is precisely that experience that allows us to achieve outstanding results for our clients facing DUI, traffic, felony and misdemeanor charges in state, federal and juvenile courts.