According to the complaint, the Silk Road’s founder, Dread Pirate Roberts, is a University of Texas graduate named Ross Ulbricht. Further, the FBI alleges that since launching the site more than two years ago, Ulbricht has made over $80 million in bitcoins through the transaction fees charged on more than $1.2 BILLION worth of drug transactions. (Of course, these numbers are all using today’s BTC rate, which is significantly higher than what it was trading at even a year ago. Even so, we’re talking a lot of money even at 2012 levels).
For a man who has been running what the FBI calls “the most sophisticated and extensive criminal marketplace on the Internet today”, Ulbricht seemed to be rather open in social media sites. He has a Google+ account, Linkedin account, and even a Youtube account where he just a few days ago marked a video called “How to Get Away with Stealing” to watch for later.A few interesting tidbits surfaced from the FBI complaint. Allegedly, Ulbricht was first questioned after ordering several fake IDs from the site himself to his address in San Francisco. He also advertised for the site, as well as recruited developers, using a non-anonymous gmail account and stackoverflow account. Supposedly, he also ordered a hit through the site on one of the users who were trying to extort him. He paid $80,000 to a hitman, who confirmed the murder had been committed. The FBI could not confirm this, and the complaint didn’t include a murder-for-hire charge.
Immediately upon the announcement, BTC plunged in price. At the time of this writing, 12:57 CST on October 2, BTC is selling on Coinbase at $91, with a $6 buy spread. Not a good day to be a Winklevoss twin.
Just as we saw with the poker industry and black friday, when one site goes down others will fill in the gap. There are several other TOR sites out there where users and addicts will turn to in order to fill the need left with the Silk Road shutdown. It will be interesting to see just how much of bitcoin’s value was tied to the Silk Road. Where will it bottom out?
We’ll keep you posted.