Forbes - Alleged Silk Road Creator's Lawyer Moves To Drop All Charges

[isthisincognito]

The trial of Ross Ulbricht, the alleged creator of the Silk Road Bitcoin-based black market for drugs, hasn’t yet begun, but it’s already raising hairy legal questions. First on the docket: Is Bitcoin even money?

In a motion filed over the past weekend, Ulbricht’s lawyer Joshua Dratel argued that all charges against his client should be dropped, including accusations of conspiracy to traffic in narcotics, launder money, hack computers, and run a “continuing criminal enterprise,” a charge often called the “kingpin” statute and used to prosecute mafia and cartel leaders. After being arrested in San Francisco last October, Ulbricht pleaded not guilty to all those charges in February.

The 64-page document calls into question everything from the legal liability of running a website where users of the site rather than its owners are engaging in illegal activity, to the definition of “unauthorized access” under the controversial Computer Fraud and Abuse Act. But the most unique argument in the motion, perhaps, focuses specifically on the money laundering charge against Ulbricht, who is accused of creating and managing the Silk Road’s billion-dollar-plus business in anonymous sales of contraband using the cryptocurrency Bitcoin.

Dratel argues that his client can’t have used Bitcoin for money laundering, because it doesn’t fit the current law’s definition of “money.”

“Count Four, which charges Mr. Ulbricht with participating in a money laundering conspiracy…must be dismissed because the allegation lacks an essential element: that the ‘financial transactions’ alleged involved ‘monetary instruments,’” the motion reads. “Bitcoins, the exclusive means of payment on Silk Road, do not qualify as ‘monetary instruments,’ and therefore cannot serve as the basis for a money laundering violation.”

Continued: http://www.forbes.com/sites/andygre...onetary-instrument-moves-to-drop-all-charges/

 

[AlphaMethylPhenyl]

But it's clear he's guilty

 

[poledriver]

OJ was as well tho. So you never know :D

 

[slimvictor]

But it's clear he's guilty

Not (really) if bitcoins aren't money!

 

[my3rdeye]

"The 64-page document calls into question everything from the legal liability of running a website where users of the site rather than its owners are engaging in illegal activity"


I have wondered about that, he never sold any drugs. How responsible are you for what happenens between users on your site? If someone sells drugs on Facebook do they arrest Mark Zuckerberg?
After the bust I was surprised they arrested SR board moderators, they are even farther away from the actual drug dealing. I honestly didn't even think that job would be considered a crime.

 

[cj]

I'm glad he has an aggressive defense attorney god knows he is going to need it.

 

[neversickanymore]

This may likely lead to some new territory legal rulings. I think he has a good chance especially if they can show the spooks entrapped him into the whole murder thing which is exactly what probably happened. They most likely created a fake situation where he thought he had no way out and then pressured him to save himself and all the people who used his sight. But really if they weren't involved none of the "violence" would have happened IMO. As proof no violence actually happened.. so it looks like a big pageant by intelligence agencies to smear and entrap him.

 

[spacejunk]

The man is innocent!
Some solidarity, people?

 

[CLICKHEREx]

I estimate that the probability is that they will have their "show trial", and ensure he is made an example of, but I hope I'm proved wrong.

 

[isthisincognito]

I estimate that the probability is that they will have their "show trial", and ensure he is made an example of, but I hope I'm proved wrong.

^ Sadly I agree.

I don't know the legal system works in the US, but here in the UK cases like this that aren't strictly defined in law can be used to set a precedent.

On another note, Section 230 (I followed the link through in the article)

Section 230 does not apply to federal criminal law, intellectual property law, and electronic communications privacy law.

Would these charges not come under federal criminal law?

 

[LogicSoDeveloped]

This could set a new precedent but I'm inclined they are going to throw as much as they can at this guy to set themselves to go after others more easily.

 

[isthisincognito]

^ Yeah, I meant that the precedent set would either be redefining bitcoin (although the IRS stated bitcoin falls under property, and not currency I think) or redefining aiding crime for remuneration (as bitcoin isn't money).

SilkRoad was a free market, but it was primarily an open drug market. I don't think you can run a service like that without accepting some responsibility, sites like google will index illegal content, but they have escalation policies and safeguards in place. They take steps to actively minimise it. Silk road took none.

I really doubt he'll get away without incarceration.

It's interesting to think of though, because if they make a precedent just to get Ulbrich, the knock on consequences of that in other industries. For example hosting a service that facilitates drug transactions. Google indexes RC websites from all over the world, some of these Scheduled in the US. Therefore that will directly knock onto yahoo, google and a million others.

There seems to be so many angles to it all in my eyes, and so many potential consequences. That being said, with the stack of charges against him they only need to make a couple stick and deliver the maximum punishment.

The odds will never be in his favour.

 

[Jabberwocky]

Not (really) if bitcoins aren't money!

Can you elaborate on this? Anything i've read implies there's literally no chance that the bitcoins' value would be anything other than true market value.

This may likely lead to some new territory legal rulings. I think he has a good chance especially if they can show the spooks entrapped him into the whole murder thing which is exactly what probably happened.

Why would that come up in the 1st place? Aren't they not prosecuting for those anymore?

 

[neversickanymore]

^Seems like he has a pretty good lawyer.. I think the difference is that they used tactics usually reserved for Spy games on a citizen.

 

[Jabberwocky]

?
am not entirely sure what you mean by that (or, 'am not sure how that's a response to what i'd asked'); dratel is a good lawyer for him in that he's(dratel) represented many fringe-type cases b4. However I'm still unsure what murder charges have to do w/ this because as I understand it they're not prosecuting that (not only do they have much easier cases that'd nail him to the wall, but - IMO - the murder charges would've been tough because it was a honeypot(IMO) to get him to agree to those hits anyways), and also the whole 'is bitcoin money' thing, well if you google you'll find some 'arguments' that really make it sound stupid to think btc's won't count as liquid assets in this type of case (furthermore, common sense dictates that they're clearly 'money' or, failing that, a liquid reserve like gold/bonds/etc; really, does anyone actually believe that a judge/prosecutor/jury will think his millions(more?) of btc aren't currency/asset? I never got that argument from the get-go, but there's been much discussion on that and it's been thoroughly 'debunked' that there's any relevance whether it was btc or USD (google w/ 'reddit' in your search, I've read some real thorough explanations there)

 

[neversickanymore]

Aw.. sorry I thought he was up on charges for the murder thing.. well thats good news as it certainly seemed home cooked from the start. IMO this one looks like it going to go on for awhile at least with so much new teritory and all..

Im no lawyer but a

The 64-page document calls into question everything

Seems to me that they may be presenting as many avenues as possible to try and get as much as possible dropped and have as much room for appeal as possible.

I hope he wins his freedom eventually and gets his not money back.

 

[Jabberwocky]

... not even trying to b a dick but still unsure WTF your post(s) mean. FWIW i agree w/ "hope he wins his freedom", i really want that more than i want to eat food tomorrow; reality is that he'll be crucified, so let's keep it the facts yeah? In the end, it's
- facilitating narcotics transactions, and, 2ndary,
- money launder/'computer-spoofing'/etc, so
in the end, he will be found guilty, despite how much I(or you) think that what he did was great, or, upon learning more about who dpr was, began to love this kid as a person. BUT, in the end, he'll just be a case-study in this niche; he certainl;;y thought he was pioneer and that he'd own this (which i'd love/respect), but in reality he didn't; understand that he was a 'front runner'and they flayed him as a result of thatn (expectedly). right now, there's ZERO online mrktplcs that can take the SR spot, hell the 2nd-best was a scam site that ran off w/ all the escrow'd BTC's. Taylor will be a martyr of sorts, but not nearly what he expected to be- and, honestly, i think he epected to not be a martyr in the 1st and thought he'd be able to do this properly. He COULD have, it woulda been easy enough to keep this going a while longer, but he fucked up in many obvious ways. A decent case study, perhaps, for the next DPR? we'll see i guess

 

[neversickanymore]

my post is pretty easy to figure out.

I dont agree with the law but he if he was the one then he is guilty as shit.

Stick to the facts? than he is likely FUCKED as he was running The Road.

EDIT: I would assume, not a lawyer again, that by attempting to get all the charges dropped with a large argument like that they would have allot of possible things to appeal against. I would also think they may succeed in getting a few dropped if by law they can individually drop them based off a argument to drop them all.

 

[spacejunk]

I'm as cynical about the legal system as anyone, but is it really necessary to state - with certainty - that this guy is guilty?
Of course they'll want to lock him up and throw away the key, but these are uncharted waters (so to speak).

The prosecution will not want to give too much away regarding NSA surveillance or anything about how they cracked TOR (or what sort of secretive backdoor access they have to darkweb information that is not in the public domain - if there is any).

I am extremely dubious that we are being told the absolute truth about this case. Perhaps Ulbricht was really careless. Perhaps evidence against him has been retrospectively engineered, or he has been the victim of an elaborate piece of entrapment.

Look at the agencies we are talking about here....

I am merely speculating that the evidence against Ulbricht was created to avoid giving too many law enforcement tactics, but it does fit US federal LE tactics, and the question is whether convicting one person is worth lifting the lid on how FBI, NSA, DHS (et al) investigations work, or how this alleged mastermind was discovered.

A really savvy defence team could put the prosecution between a rock and a hard place with this - and...it may not be mentioned in all the news articles, but surely the alleged "killings" wouldn't just be left out of the charges?

The apparent 'DPR' bust makes for good headlines, but surely the murder allegations are the most serious and most likely to result in the sort of sentence the agencies involves would be looking for, were he be convicted.

I could be wrong, but I thought the alleged murder/attempted murder was the major point the prosecution's case depends upon. The rest of the charges are arguably within the realms of (a new kind of hi-tech) white-collar crime; but ordering a hit on a couple of vendors is both an escalation of the alleged criminal activity and a strong piece of propaganda against Ulbricht being some kind of modern day folk hero.
Having said that, I've not been following the case too closely in recent times, but it has appeared since his arrest that there is more to the whole investigation than has been publically released.

bmxxx, you're probably correct that he'll be stitched up regardless - but in my eyes he is still an innocent man until proven otherwise.
Im pretty cynical about the "justice system" in cases like this - but in any case, it will be interesting to see how this pans out.

 

[Timland]

This poor gentleman will probably get a life term via consecutive prison sentencing. The feds love to use life sentences one way or another, like with William Pickard.

But I am so glad he [allegedly] created SR. It has put the DEA on the defensive because it made mail order Schedule I and II substance ordering simple and [mostly] secure - even when shipped across national and continental lines. This gave rise to people, ordering things including cannabis where they otherwise wouldn't over SR because they know nobody in person - you had soccer moms and such buying from these places. Affluent persons in IT certainly knew about Tor and mastered using Bitcoin in no time.

Like music piracy, law enforcement will always be two steps behind and each time a big effort gets shutdown by the feds, the proprietors will learn a great deal about what went wrong and will develop stronger, more robust solutions. SR was the Napster of mail order drugs. And certainly mail order drugs existed way back to Usenet and Arpanet days, much like there were XDCC bots and FTP sites hosting Mp3s and Mp2s before Napster, but nothing on such a grand scale. I believe wholeheartedly that the biggest weapon to making the feds give up this war on drugs is persons like Ulbrecht continuing to have the balls to develop and maintain sites like SR with common sense guidelines like disallowing pedophilic content, WMD, and other things that truly are wrong to sell/barter. The feds took years to destroy SR, and that is pathetic considering how poor Ulbrecht's informational security and operational security was - if the feds were half as competent it would've been exposed and he would've been prosecuted 2 years ago.

Now we are in the WinMX, Limewire, Morpheus, Bearshare phase. When we get to the Bittorrent phase of internet based ebay-style mail order of substances en masse, the feds will be in deep shit. This is a front on the war on drugs they cannot afford to remain behind on, f they ever expect to keep their jackboots on the neck of laissez-faire buying, selling, bartering of pharmaceuticals.

SR allowed for laissez-faire buying and selling of drugs with none of the gang warfare bullshit associated with street level drugs often. It allowed feedback so that if a person was lying about the purity of their MDMA it would be known. Have you ever had anyone tell you their cocaine was 75% pure? Or MDMA crystals were 82%? lol.

You don't need to be a recreational drug user to appreciate the effect SR's existence had on the war on drugs. SR may not have been created for the purpose of promoting freedom and liberty, but it has done that IMO. Tor, which ironically was created by the feds, specifically the US Navy, and Bitcoin together is a force that has not had the feds shaking so much since the en masse youthquake of drug use that happened in 1967. THIS is the beginning of the end of the travesty that is the war on drugs. This is a front opened up that is effectively on the offensive with no slowing down against the feds.

The ONLY reason SR was busted was because of SERIOUS opsec and infosec errors both, just from the FBI probable cause affidavit I was shocked it wasn't penetrated and shutdown much sooner than it was. That said, SR has sent a loud message: that you could be as rich as a drug kingpin without the usual quandaries of violence from competitor reprisals, anyone knowing your name or face, etc. Prerequisities being a background in IT - particularly Linux CLI and some networking experience. So unsurprisingly, a hydra of newer sites replaced SR including one taking its name.


Hell, the US postal inspectors couldn't even screen and catch mail bombs back when Ted Kacynski was mailing them all over the place - his brother turned him in. So they are hopeless at stopping 250mg of cocaine or 2.5g of Methamphetamine crystals from being sent all over thanks to advents in technology that obfuscate the contents both from animals and x-ray - where a jar of liquid GHB even or bulk LSD can be shipped with peace of mind.

They might have busted some of the vendors selling kilogram quantities -- mostly because those persons were dealing in ACH bank transfers, paypal, and other traceable sources on the side, including Ulbrecht. But many vendors [or, if you prefer, dealers] only sold personal quantities that they could discreetly drop off in a USPS blue dropoff box once a week at 2-3AM two or three counties away.