Well, probably not, but it was in the cards from the beginning. Ulbricht, under his Silk Road Dread Pirate Roberts’ persona, had taunted the Feds for years and flaunted the fact that they lacked the cyber smarts to penetrate his market. It was a strategy that was destined to produce a lust for revenge if the government ever got their hands on him.
In the end, it was not the fact that the Feds had compromised the Tor browser or were able to decode the bitcoin chain that brought Ulbricht down. It was pure old-fashioned police work. Basically, it was a sting operation orchestrated with the help of now-disgraced agent, Carl Mark Force. Force, posing as a Columbian drug dealer, gained Ulbricht’s confidence and manipulated him into his eventual capture.
I doubt whether the government could have gained control of enough Tor nodes to decipher communication sources. I am also sure that they were not able to trace bitcoins back to their owners. Why? Because when Force extorted hundreds of thousands of dollars from Ulbricht, he hid his money in a variety of bitcoin depositories. If he had thought they could have been easily traced, he certainly wouldn’t have tried this, let alone attempted to set up his own bitcoin exchange business. Besides, even the government admits that it can’t trace some of his money.
For Ulbricht, the writing on the wall occurred when any information of a connection with Force and any testimony from him were disallowed by the judge. She claimed this would have no bearing on the trial, which, to me, seemed difficult to believe. This being the case, however, it was clear that Ulbricht was sure to be convicted and that he would be given a heavy sentence.
Ulbricht’s lawyer knew this, too. This is probably why he had Ulbricht, Ulbricht’s mother, brother, sister, and friends (100 in all) write letters to the judge asking for leniency in the sentencing. The underlying message in these letters was that Ulbricht was a misguided but honest young man who didn’t understand the seriousness of what he had done. He pleaded with the judge not to take away his entire life. He was sorry. He said he wished he could change the past, and he included photos of himself with his family to show her he was just a confused all-American, family-oriented kid. His mother took more or less the same approach in her appeal.
The truth of the matter is probably more like this. Ulbricht’s idea for the Silk Road started out as nothing more than a computer savvy kid having some fun. He enjoyed toying with the government and he liked the adulation he got from his supporters. He didn’t like the idea of big government poking its nose into the private affairs of normal people and this was his way to fight against it. There was a certain sense of self-righteousness in it. I don’t think he had any idea that Silk Road would become as popular as it did. When it did, and when Dread Pirate Roberts became something of a celebrity, it kind of went to his head. He began to believe in his own invincibility and showed this off by taunting law enforcement officers. Besides, I don’t think he took them seriously in the beginning. It was only after Silk Road became too well known and the Feds began serious efforts to take it down that Ulbricht’s attitude changed from arrogance to paranoia. In the end, it must have come almost as a relief for him to be caught and to no longer have to worry about looking over his shoulder and mistrusting everyone he met. This aside, I still think he never really believed he’d be caught.
In the end, he was convicted on seven charges. U.S. District Judge Katherine Forrest claimed that Ulbricht was “no better a person than any other drug dealer” and that “what you did in connection with Silk Road was terribly destructive to our social fabric.” The prosecution claimed that he was responsible for the drug-related deaths of six people and even flew the parents of one of these victims in from Australia to add an emotional angle to the proceedings. “Make no mistake: Ulbricht was a drug dealer and criminal profiteer who exploited people’s addictions and contributed to the deaths of at least six young people,” Manhattan U.S. Attorney Preet Bharara stated. By the end of the trial, such declarations had made the proceedings a showcase of form over substance.
The money laundering charge stemmed from the fact that purchases on the Silk Road marketplace were done in untraceable bitcoins. Ulbricht sold no drugs himself but supplied a location for others to make deals, for which he received a commission. Yes, it’s true that he probably earned $18 million from the site, but, let’s face it, he could have earned a lot more. As part of his penalty, Ulbricht was fined $184 million. Now, unless payment for prison work has increased substantially in recent years, even a life sentence won’t help him pay off this amount. Of course, the government knew he didn’t have such money, but they were hedging their bets. With this addition to his sentence, they could now legally claim as theirs any bitcoins they found on his laptop and servers.
In fact, most of the charges against Ulbricht were for his facilitating illegal activities. I have trouble seeing him being responsible for the deaths of six drug users. This seems to be a common theme in America these days. No one is ever responsible for their own actions. If I have a gun shop and a guy buys a gun from me and shoots himself, am I responsible for his death? Should I be tried for murder? If I sell a bottle of wine to someone who eventually becomes an alcoholic, am I guilty? If so, then let’s get to the real Merchants of Misery, the wine-grape growers. They know where their grapes are going. They can’t claim ignorance. Thus, using the above logic, if someone on a wine-fueled drinking spree kills some innocent people while drunk driving, those evil-doers, those heartless grape growers should be the ones who serve the life sentence for murder. The driver, after all, wouldn’t have caused such destruction had wine not been so readily available. It’s not his fault. Although Judge Forrest apparently followed this line of reasoning, most people in the court didn’t and were stunned by the verdict of a life sentence without parole.
There was also, in the sentence, the rationale that an example must be made of Ulbricht to dissuade others from pursuing a similar course. Although I understand the reasons for this, I still wonder if this constitutes true justice. In other words, did the penalty match the crime? If we look at other criminals who have received similar sentences, we would find, Bernie Madoff who got a virtual life sentence (150 years) for actively swindling people out of billions of dollars and ruining numerous lives, Charles Manson who is still serving his life sentence for murder, and Jeffrey Dahmers who killed and ate people. Ulbricht is in good, if somewhat incongruous, company.
Anyway, the questions must be asked as to whether the actions against Ulbricht have really had an impact on the deep web markets. The answer is, yes. The new markets have developed a more impenetrable infrastructure. No, they have not closed down. Not long ago I reported on the opening of a new deep web market called TheRealDeal. At that time, they only wanted to be a market place for zero-day and other exploits. Well, not anymore. The predominant market sector now is, you guessed it, drugs. They operate within the following infrastructure:
“To make things simple, once you place an order the system generates an ‘escrow’ address which can only be controlled if 2 out of 3 parties (Buyer, Vendor, Admin) sign for its transaction. The vendor should then click ‘sign’ once the order is dispatched, and the buyer should click ‘sign’ only after the product has arrived. In case of a dispute – one of our admins can sign and decide how to split the coins based on the problem and after looking into the matter. Read more about multi-sig here if you need to – but we can gu(a)rantee that coins cannot be stolen and users cannot fraud each other. The coins can only go to the address of the buyer or the seller and only after being signed by at least 2 sides of the deal. All transactions take 1 confirmation from the bitcoin network. Please be patient.”
So did the court set an example that deterred new deep web markets from opening? You be the judge.
I’m certainly not saying Ulbricht wasn’t guilty. Even he admits he was guilty of some of the charges. If nothing else, he could be put away on tax evasion. I just feel that the sentence of life in prison without parole is not in keeping with the American ideal of justice. It seems unnecessarily heavy-handed and more influenced by revenge than by reason. Something’s just not right. To no surprise, both the verdict and sentence will be appealed by Ulbricht’s lawyers. I’m going to go out on a limb here and predict that this current sentence will not hold up under closer scrutiny. However, if it does, the US legal system has far more problems than deep web markets.