Original URL: http://www.theregister.co.uk/2013/10/25/silk_road_bitcoin_seizure/

Ahoy, scalliwags! FBI claims another haul of Silk Road booty - $26m of it

144,000 Bitcoins seized from 'Dread Pirate Roberts'

By Neil McAllister

Posted in Law, 25th October 2013 23:54 GMT

The US Federal Bureau of Investigations says it has seized a cache of Bitcoins worth some $26m, a treasure trove it claims belonged to accused Silk Road mastermind Ross Ulbricht, aka the "Dread Pirate Roberts."

The 29-year-old Ulbricht was arrested at a public library in a sleepy neighborhood of San Francisco earlier this month on charges of drugs trafficking, money laundering, computer hacking, and conspiracy in connection with his involvement with online black marketplace Silk Road.

Prosecutors allege that Ulbricht operated Silk Road since early 2011 as an encrypted, anonymous web bazaar of narcotics and other illicit wares, during which time he allegedly enriched himself to the tune of $80m as a facilitator for these illegal activities.

Further complicating matters for law enforcement, the Silk Road's medium of exchange was not dollars but Bitcoin, the anonymous, cryptographically based digital currency.

At the time of Ulbricht's arrest, the FBI bragged that it had seized nearly 30,000 Bitcoins from accounts linked to Silk Road, a sum worth around $5.4m at today's exchange rates.

Now an anonymous FBI source has told Forbes that the bureau has confiscated another 144,000 Bitcoins and that it believes these funds also belong to Ulbricht. That brings the total amount it has snatched from Silk Road close to $32m, making it the largest-ever Bitcoin seizure by law enforcement.

"This is unprecedented," the FBI source told Forbes's Andy Greenberg. "Even if this were a regular drug case, it would be huge."

Exactly how the bureau was able to trace the funds to Ulbricht and take control of them, however, the FBI official wouldn't say.

What's more, losing control of his booty may be the least of the Dread Pirate Roberts's worries: prosecutors claim Ulbricht had paid $80,000 to an undercover agent whom Ulbricht believed would carry out the "torture and murder" of a former Silk Road employee. Ulbricht is also believed to have paid $150,000 to a Silk Road user to bump off another user who was blackmailing him, although there's no evidence that this murder ever actually took place.

Even if Ulbricht never actually caused anyone bodily harm, the charges he faces are serious, and if convicted he could be sentenced to life in prison.

Ulbricht is expected to stand trial in New York, even though he was arrested in California, because the US Attorney filed charges against him in that district.

Although he was represented in his first few court appearances by a public defender, he has since retained the services of defense attorney Joshua Dratel, whose past clients have reportedly included an al-Qaeda operative, a Guantanamo Bay inmate, and a man accused of funding Somali terrorists. ®