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Ross Ulbricht found guilty of Silk Road conspiracy charges

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Today in a federal courthouse in Manhattan, Ross Ulbricht has been found guilty of charges stemming from his role in the founding and operation of the Silk Road. After nearly four hours of deliberation, the jury found Ulbricht guilty on all seven counts, including charges of narcotics conspiracy, money laundering conspiracy, and engaging in a continuing criminal enterprise. The Silk Road offered a platform for quasi-anonymous transactions, shielded by Tor's anonymity network and the transaction-masking properties of Bitcoin, and hosted more than $100 million in drug transactions before it was shut down by law enforcement in October of 2013.

Over the past three weeks, the prosecution rolled out a wealth of evidence that Ross Ulbricht was the Dread Pirate Roberts, the pseudonymous leader of the Silk Road, and had facilitated and profited from millions of dollars worth of drug transactions during his time running the site. Ulbricht's personal journals were entered into evidence, many of which referred to his actions running the site. One friend testified that Ulbricht had asked him for technical advice, explaining that he was working on a "website where people can buy drugs." The prosecution also revealed digital evidence that linked Ulbricht to the Dread Pirate Roberts, including a PGP key used to sign Dread Pirate Roberts' emails, which was found on Ulbricht's laptop. "[The evidence] is overwhelming," said prosecutor Serrin Turner during his closing statement. "And to a significant extent it's undisputed."

The FBI traced $13 million from the Silk Road to Ulbricht's bitcoin wallet

The ledger properties of Bitcoin also helped the prosecution make its case. FBI agents found Ulbricht's bitcoin wallet when they seized his laptop, uncovering millions of dollars that Ulbricht had unfettered access to. Ulbricht hadn't bothered to run his transactions through a laundering system, so Bitcoin's public ledger made it easy to identify any accounts his wallet had received money from. All of the transactions on Silk Road took place in bitcoin, so they are all present in Bitcoin's public ledger in some form, and law enforcement agents have been busy chasing down those leads in the months since Ulbricht's arrest. Testifying before the court, former FBI agent Ilhwan Yum traced more than $13 million in direct transactions from the Silk Road to Ulbricht's wallet, making a strong case that Ulbricht had been profiting from the site and, by extension, a number of illegal drug transactions.

Ulbricht's defense had a hard time countering the onslaught of evidence. The team admitted at the outset that Ulbricht had been involved in the creation of the Silk Road, but claimed he had handed the site off to someone else early in development. That theory got a big break in the early days of the trial, when Homeland Security agent Jared Der-Yeghiayan admitted he had initially suspected Mt. Gox founder Mark Karpeles was behind the Silk Road. But the bulk of Der-Yeghiayan's testimony ended up being barred by the court as either hearsay or immaterial speculation, effectively neutering the defense's line of argument. Two other technical witnesses called by the defense were barred from testifying for procedural reasons, and Ulbricht subsequently declined to testify himself. That left the defense with few ways to make its case.

The Silk Road was once seen as a prototype for the idea of truly anonymous commerce, enabled by technological developments like Tor and Bitcoin, but today's verdict seems to have left that idea in tatters. Blake Benthall, Ulbricht's alleged successor as the Dread Pirate Roberts and proprietor of the Silk Road 2, is currently facing similar charges from the same district attorney, and one of the Silk Road 2's administrators was charged while the Ulbricht trial was still being argued. There are plenty of other dark web drug markets still in existence, but so far no one has stepped forward to claim the Silk Road mantle in the wake of the two arrests. Ulbricht's sentencing has been scheduled for May 15th.