The case against Silk Road's 31-year-old founder was unprecedented
Judge Katherine Forrest noted the case against Ross Ulbricht, 31, was "unprecedented" though she did say to him, "You are no better a person than any other drug dealer."
Forrest also emphasized that anyone who intended to fill Ulbricht's shoes and continue the Silk Road operation should know their actions will be met with "extremely serious" consequences.
There were two reasons this case was unprecedented:
- It's the first time the government used the term "money laundering" to include digital currency.
- It was one of the first times an individual was charged for building a website. The trial could open the door to criminal liability for web hosts, who are supposed to be protected by the 1996 Communications Decency Act.
The challenge for the prosecution was to prove that Ulbricht was in fact Dread Pirates Roberts - the person who was running the black market e-commerce site Silk Road when the FBI shut it down in 2013.
Throughout the trial, the unprecedented question of how far the government may go to uncover internet users' identities gave the defense a potential advantage. The FBI, the defense argued, infiltrated Silk Road's servers in a warrantless hack, which was tantamount to an illegal search. For its part, the prosecution claimed they simply had a "lucky break" when an error in the Silk Road page leaked the IP address linking Silk Road servers back to Ubricht.
As a result, the judge also ordered during sentencing that Ulbricht forfeit $184 million dollars. The government estimated that Silk Road made a profit of almost $200 million, and over $1.2 billion in illegal drug transactions were made before the site was shut down in 2013.
Ulbricht's defense, who objected to the use of the term "money laundering," tried to get out of the laundering charges last year by claiming that Bitcoin is not real money. The judge didn't buy it, however, ruling that "Bitcoins carry value - that is their purpose and function - and act as a medium of exchange."
Ulbricht's supporters have expressed fears that his conviction could open the door to criminal liability for web hosts, thereby curbing online freedom of speech. Ulbricht's family has said that Ulbricht should be protected under the 1996 Communications Decency Act, which protects ISPs from liability for the user content they host in order "to preserve the vibrant and competitive free market that presently exists for the internet ... unfettered by Federal or State regulation."
Ulbricht was convicted in February of all seven counts including trafficking drugs on the internet, narcotics-trafficking conspiracy, running a continuing criminal enterprise, computer-hacking conspiracy, and money-laundering conspiracy.
While Ulbricht's defense attorney, Joshua Dratel, never denied that Ulbricht had founded Silk Road, he argued that Ulbricht left the site at its peak for quite some time and only rejoined right before his arrest.
Dratel repeatedly claimed that somebody else took over the site after Ulbricht started and expanded it into the massive narcotics emporium it became. However, the defense struggled throughout the trial to come up with alternative "DPRs" - especially as the journal entries and chat logs found on Ulbricht's laptop (in which he refers to Silk Road as a "criminal enterprise") continued to incriminate him.
Parents of drug overdose victims who spoke at Ulbricht's sentencing noted how Silk Road's combination of accessibility and anonymity proved deadly for their sons. One of those sons overdosed on heroin, and the other suffered fatal head trauma after taking a synthetic drug and jumping off a building.
The drugs that ultimately led to their deaths, their parents said, were purchased on Silk Road.
Shortly after his arrest, Ulbricht was accused of hiring assassins to murder six targets that threatened the existence of Silk Road. The prosecution - led by Serrin Turner - alleged that files were collected from Ulbricht's laptop detailing his plans to kill staff members he suspected were stealing money or leaking clients' information.
The prosecution never officially filed the murder-for-hire charges, but Ulbricht was denied bail on the basis of these accusations and the judge stated Friday that there was "ample, unambiguous evidence" based on his own journal entries and the chats he had with hitmen that Ulbricht "paid hundreds of thousands of dollars for the murders."
In a heartfelt letter to the judge before his sentencing, Ulbricht wrote that his motivations were more ideological than financial.
"I created Silk Road because ... I believed at the time that people should have the right to buy and sell whatever they wanted so long as they weren't hurting anyone else," he wrote.
He reiterated that belief Friday when he addressed the court directly, but added a caveat: "I've changed," he said, "I wish I could go back and convince myself to take a different path."