Ross Ulbricht was once the King of the Silk Road, the dark web drug marketplace where anyone with two Bitcoin to rub together could order anything from an ounce of weed to a kilo of heroin, and all the research chemicals and designer intoxicants in between. Known in those days as The Dread Pirate Roberts (a name loving co-opted from that of the ever-changing criminal in The Princess Bride), Ulbricht’s identity was a constant source of speculation as he had kept to a strict regimen of anonymity to preserve his marketplace and the millions of dollars he had been accruing.
It seemed no law enforcement agency could unmask him, yet his highly publicized trial in 2015 told a different story. While services like TOR (The Onion Router, a Byzantine system of Internet relays designed to mask a user’s identity) provided him some refuge from identification, it allowed FBI agents to replace one of his trusted lieutenants and accumulate enormous amounts of evidence that would lead to his successful prosecution.
Even his chosen system of payment, Bitcoin, allowed for a digital paper trail that connected the mild-mannered coder to his Silk Road income. Every Bitcoin transaction is kept permanently in the ledger of the blockchain, and while the transactions themselves are anonymous, they can all be traced to individual conversions between hard currency, which is highly regulated by US Anti-Money-Laundering (AML) laws and led to IRS involvement in Ulbricht’s conviction.
New technologies are constantly being deployed to combat these investigative techniques. As an example, Bitcoin “tumblers”, services that attempt to obscure transactions in a similar way to TOR), are currently used to obfuscate Bitcoin traders for Silk Road successor sites like Open Bazaar. Despite these, law enforcement agencies have effected prosecutions of many dark web drug vendors using the electronic fingerprints these services leave behind.
Money Laundering and Bitcoin
More recently, a Bitcoin criminal prosecution involved money laundering charges. A man was arrested for exchanging Bitcoins for cash after undercover officers posed as individuals wanting to use the Bitcoin to use it to buy stolen credit card numbers. The judge ultimately ruled that the man could not be charged with the crime as the law was vague when applied to Bitcoin.
If you have been charged with a crime such as money laundering or misappropriation of funds, you need experienced criminal defense attorneys on your side. Although you may have been charged with a crime, that does not mean that you will ultimately be found guilty. Bitcoin criminal prosecutions are only successful if the prosecutor is able to prove every element of the crime beyond a reasonable doubt. Defending against Bitcoin criminal prosecutions is technical and requires a criminal defense legal team that is knowledgeable and experienced. Contact the Bitcoin criminal prosecutions defense attorneys at Hammerschmidt Law Corporation at 559.248.1469 if you are in need of legal help.