Silk Road operator arrested, bitcoin price getting hammered?

C

Caput Lupinum

Well-Known Member
Silver Stacker
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. The FBI arrested Ross William Ulbricht, known as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings. Federal prosecutors charged Ulbricht with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, according to a court filing.
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http://www.zerohedge.com/news/2013-...owing-us-government-seizure-silk-road-website
 
Looks to have been about a $20 USD haircut on the price across the board on MtGox, btc-e and ANX.

Will be interesting to see how much of an effect there is long-term on the price. BitPay are claiming 7,500 business customers, so they weren't all being spent on dope.

My signature is still valid :P
 
I am truly amazed that this guy was living in the US... any sensible person running such a website would have been out of there long ago. I cant help but think he is a bit of an idiot.
 
Dabloodymess said:
I am truly amazed that this guy was living in the US... any sensible person running a business would have been out of there long ago. I cant help but think he is a bit of an idiot.
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Fixed it for ya
 
The End of the Internet's Biggest Black Market Is Good for Bitcoin

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For most of its brief existence, Bitcoin has been widely associated with Silk Roadthe anonymous cybercurrency, naturally enough, wound up backing transactions on the shadowy online market for drugs, hacking services, and other illegal activities. So it makes sense that the value of Bitcoin would fall off a cliff as news broke that the FBI had arrested a man suspected of running the most famous online black market. The value of Bitcoin dropped to about $110 by early Wednesday afternoon, down from $140 earlier this morning.

But people in the more legitimate corners of the Bitcoin world believe the apparent demise of Silk Road is the best thing that could happen to the currency. "I think it's a huge positive," says Fred Ehrsam, the co-founder of Bitcoin startup Coinbase. "This kind of takes the biggest target that people might speak negatively about when it comes to Bitcoin, and takes it off the map."

According to a recently unsealed FBI complaint, Ross William Ulbricht had been running Silk Road from January 2011 until agents tracked him down in a San Francisco apartment this summer. Ulbricht named himself the Dread Pirate Roberts, after the character in The Princess Bride, and the FBI complaint describes his alleged role overseeing a small staff that kept the network running. Earlier this year he paid for the murder of someone who was threatening to release the names of thousands of Silk Road users, according to the complaint, and Ulbricht is quoted through correspondence suggesting the murder actually happened (although the FBI could find no evidence).
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Read more: http://www.businessweek.com/article...s-bitcoin-value-and-saves-bitcoins-reputation
 
If they seize enough bitcoins in these operations, pretty soon the biggest holder of bitcoins will be the US govt

:lol:
 
The defendant was allegedly brought down by a seemingly innocuous request from an amateur user on tech site, Stack Overflow.

The user reportedly asked, "How can I connect to a Tor hidden service using curl in php?", to which Mr Ulbricht allegedly provided an answer - that the user could use his website, Silk Road.

The slip-up occurred when Mr Ulbricht allegedly replied using his real name on Stack Overflow.
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For someone you'd think was reasonably smart. He made a dumb mistake. My guess is he didn't realize every silk road related post was probably being investigated by a team of FBI agents.

Another dumb mistake was keeping operations in the USA.

Edit. The above quote is wrong. Mr Ulbricht actually posted the question on Stack Overflow. This is concerning to me since I actually answered that question (correctly I might add). Hope I'm not on a FBI hit list now.
 
If the FBI agents had half a brain amongst them. They would have kept the silk road running and inserted code to identify the drug sellers' IP address (not impossible if you own the server). Then take them down one-by-one.
 
Just wondering, what if the US gov decided to sell all the bitcoins they seized? Would that create a massive sell off resulting in a massive crash?
 
Only $3.6m worth were seized - now worth probably $3m. Already 4 times that turnover today on MtGox alone.
 
willrocks said:
If the FBI agents had half a brain amongst them. They would have kept the silk road running and inserted code to identify the drug sellers' IP address (not impossible if you own the server). Then take them down one-by-one.
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Drug dealers are obviously not the target.
 
willrocks said:
...Another dumb mistake was keeping operations in the USA...
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Well the Pirate Bay wasn't in the USA and they still got raided by the USA, sort of.
 
willrocks said:
If the FBI agents had half a brain amongst them. They would have kept the silk road running and inserted code to identify the drug sellers' IP address (not impossible if you own the server). Then take them down one-by-one.
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The largest drug seller's servers are located in Langley, Virginia! ;)
 
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