What if the real mastermind behind the Silk Road drug market wasn't Ross Ulbricht, who's currently charged with running the site, but Mark Karpeles, the CEO of the ill-fated Bitcoin exchange Mt. Gox? According to new developments in the trial today, it's not as crazy as it sounds. DHS agent Jared Deryegnan admitted under cross examination that the agency had suspected Karpeles of running the site and had prepared an affidavit to search Karpeles' email as part of the Silk Road investigation. One of Karpeles' companies had registered "Silkroadmarket.org," leading investigators to consider him as a suspect. Other evidence ultimately implicated Ulbricht, convincing even Deryegnan, but for a long time, the investigation saw Karpeles as a prime suspect.
DHS agent's OWN THEORY around early to mid 2013 was that Mt. Gox and Silk Road worked in tandem.— Sarah Jeong (@sarahjeong) January 15, 2015
It's welcome news for the defense, which has positioned Ulbricht as a fall guy throughout the trial. According to Ulbricht's lawyer Joshua Dratel, the real Silk Road mastermind "is still out there." In the wake of Mt. Gox's spectacular and mysterious collapse, Karpeles is as likely a candidate as any. Karpeles' Mt. Gox exchange collapsed after $400 million went missing from its accounts, and many in the Bitcoin community still view him with mistrust over his actions in the wake of the compromise. According to Motherboard, Deryegnan saw Silk Road and Mt. Gox as mutually beneficial. "[Silk Road] would be a device for leveraging the value of Bitcoin, and if he could create a site independent of Bitcoin, you could control the value of Bitcoin," one email reads. Still, it seems far-fetched that Karpeles could have run Silk Road and Mt. Gox simultaneously, especially given Gox's own notorious technical difficulties.