US forces Silk Road to give up $28M in bitcoins

A New York court forced Ross Ulbricht to forfeit 29,655 bitcoins and the Silk Road website

The founder of the Silk Road underground website has forfeited the site and thousands of bitcoins, worth around US$28 million at current rates, to the U.S. government.

The approximately 29,655 bitcoins were seized from the Silk Road website when the Federal Bureau of Investigation (FBI) moved to close it in late September. The site served as an underground marketplace for drugs and other illegal items, relying on bitcoins for transactions because such payments are much more difficult to trace, the government says.

Ross Ulbricht, also known as "Dread Pirate Roberts," operator of the site, was arrested on Oct. 1 in a San Francisco public library while allegedly logged into the site, according to court papers. He was subsequently charged with one count of narcotics conspiracy, one count of conspiracy to commit computer hacking and one count of money-laundering conspiracy.

The government had argued that the bitcoins were used to facilitate money laundering and thus should be forfeited along with the website.

"The United States Marshals Service shall dispose of the Silk Road Hidden Website and the Silk Road Server Bitcoins according to law," wrote Judge J. Paul Oetken, of the U.S. District Court for the Southern District of New York, in a court order that was issued on Wednesday but not made public until Thursday.

The ruling represents the largest-ever forfeiture of bitcoins.

"It is the intention of the government to ultimately convert the bitcoins to U.S. currency," said Jim Margolin, a spokesman for the U.S. Attorney's office for the Southern District of New York.

Once converted, the bitcoins, like monetary proceeds of other crimes, will go into the government's general fund, he said. There, they will be used for general-purpose spending.

The bitcoins that Ulbricht forfeited are a fraction of the total amount seized by the government in connection with the case.

The government still holds an additional 144,336 bitcoins, worth around $130 million at present, and has asked a court to order the forfeiture of those assets, too. Ulbricht filed a claim contesting the government's move and asserting he is the owner of the bitcoins, the U.S. Attorney's Office said.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags cybercrimelegalU.S. Department of JusticeCivil lawsuitsU.S. Federal Bureau of Investigationsilk road

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?