Bitcoin Walks The Plank And Wall Street Supports Circle


It seems the attorneys for Ross Ulbricht AKA the Dread Pirate Roberts – have reached the end of the line as federal judge Katherine Forrest rejected their request for a retrial earlier this week (April 27).

Ulbricht was convicted in February for being the man behind the Silk Road online illegal drug trade website that used bitcoin as its currency of choice. For some, Silk Road was profiled as perpetrating crimes that had no victims; for others — like the loyal following who stood behind Ulbricht and his “libertarian experiment,” Ulbricht was framed, despite allegations that Ulbricht paid $500,000 (in bitcoins) to have five people assassinated to protect his true identity. (No reports were ever filed indicating that anyone was actually killed).

For the bitcoin community, it’s a case they’d like to put behind them. It’s been one of the most scintillating cases, and it’s drawn international attention. And, soon the bitcoin community may get their wish, as Ulbricht’s case has its final act: the sentencing which is scheduled for May 15.

Ulbricht was convicted of seven federal criminal charges — including drug trafficking and criminal conspiracy charges — stemming from a site that ran the massive online illegal drug trade that brought in billions of dollars for selling heroin, cocaine and crystal meth. What started as a small site selling homegrown, illegal mushrooms soon turned into a giant bazaar for narcotics-trafficking, illegal goods, computer-hacking tools and money-laundering to an audience in the thousands.

Ulbricht’s defense centered on claims that witnesses’ testimonies would have weakened the FBI’s evidence in relation to how it connected Ulbricht to the bitcoin transactions that the Feds claimed were run through the site to Ulbricht’s account. In March, Ulbricht’s attorneys filed a motion for a retrial on the claims that Ulbricht was denied his Fifth Amendment rights, suggesting that Ulbricht’s trial was denied adequate time to review documents that would have proved his innocence. The attorneys also claimed a key expert witness in the case for the defense was traveling during the time the witness’ testimony was due, so his testimony was not allowed to be properly entered into court. Ulbricht’s attorneys claim that testimony would have implicated another party who was actually the Dread Pirate Roberts.

But that wasn’t enough to convince the judge to overturn the conviction.

More recently, Ulbricht’s attorneys got another potential big break in their side of the case when two former federal agents who were involved in the case’s investigation were arrested for criminal conspiracy and bitcoin laundering based on evidence collected in the case from Ulbricht’s laptop. Former Drug Enforcement Administration officer Carl Mark Force IV and former Secret Service officer Shaun Bridges have since been charged with money laundering and fraud after being accused of stealing and converting the bitcoins into their own personal accounts, instead of turning them over to the government. Force was also charged with theft of government property and conflict of interest.

In light of those accusations, Ulbricht’s attorneys claimed the case had been tainted by the investigators and claimed their testimony should become void. Still, that wasn’t enough for the case to merit a retrial, according to the judge.

“The evidence of Ulbricht’s guilt was, in all respects, overwhelming. It went un-rebutted,” she wrote in her ruling, according to a report by Wired, which has been following the case. “This motion for a new trial…does not address how any additional evidence, investigation, or time would have raised even a remote (let alone reasonable) probability that the outcome of the trial would be any different.”

According to Wired’s report, Forrest said Ulbricht’s attorneys had not presented sufficient evidence on any of its claims of why Ulbricht deserved a retrial, especially because of the fact that the evidence heavily supported the conviction. (Not to mention the fact that Ulbricht was caught firsthand and red-handed logging into the site as the administrator.) The computer belonging to Ulbricht that was seized by the Feds also had a massive amount of damaging evidence against him.

“The government presented overwhelming evidence of Ulbricht’s guilt. Ulbricht was caught red-handed — logged in and chatting [under his pseudonym the Dread Pirate Roberts] on a personal laptop, which Ulbricht unquestionably owned, filled with Silk Road files,” Forrest wrote in her ruling. “In the face of this mound of evidence, there is no faint possibility, much less ‘reasonable probability,’ that the jury would have reached a different verdict.”

She also addressed the claims that the federal agents involved in the case could have tainted the evidence, saying that the ex-agents were part of the Baltimore-based investigation that was linked to another aspect of the case. It was the New York-based investigation that led to Ulbricht’s arrest. While Force was connected with the investigation more directly since he took payment from Ulbricht, it was only while Force was working as an undercover spy for the DEA.

“The Rogue Agents did not participate in the [Southern District of New York’s] investigation of Silk Road that resulted in defendant’s arrest and indictment, and none of the evidence at defendant’s trial came from the…Baltimore investigation in which the Rogue Agents participated,” she wrote. “That the Rogue Agents may have exceeded the scope of their authority in the…Baltimore investigation does not, in any way, suggest that Ulbricht was not the Dread Pirate Roberts.”

While Ulbricht’s sentencing is set for May 15, his attorneys may be trying to push that date back because of the fact that his multiple convictions could land him in prison for life. The Wired’s report indicates his attorneys may be working with prosecutors to seek a lighter sentence.

Bitcoin Tracker | Week 71

If you’re weighing the figures, or the plus side versus the dark side (as in our case), it appears to be a good week for bitcoin. That is, there was much more positive news than negative this week. The Silk Road case may soon be out of the headlines and bitcoin got more Wall Street support. Bitcoin companies are also helping bring relief to Nepal’s earthquake victims. On the dark side, however, Nevada authorities are after an illegal online gambling site that operated using bitcoin.

As always, if you have any news you’d like to share, please send it our way at

On the Plus Side …

Jeremy Allaire’s bitcoin startup Circle secured a major investment from Goldman Sachs and IDG Capital Partners to the tune of $50 million. Goldman and IDG join previous Circle investors Breyer Capital, General Catalyst Partners, Accel Partners, Oak Investment Partners, Fenway Summer, Digital Currency Group and Pantera Capital.

Circle is not the only digital currency startup garnering attention from some very mainstream financial players – rival firm Coinbase recently finished off a large growth that saw participation from the New York Stock Exchange and USAA. With the latest infusion of cash, Circle will now upgrade its services to allow customers to send and receive U.S. dollars as well as bitcoin.

  • April 27, 2015: Bitcoin Shop, a D.C. bitcoin company has raised $2.3 million in venture capital.
  • April 27, 2015: Bitcoin is gaining more mainstream adoption as the bitcoin community is working to help educate others. Inside Bitcoins kicked off in New York this week to help eager bitcoin enthusiasts learn more about the currency.
  • April 28, 2015: The bitcoin marketplace Purse said it has added a product to expand its eCommerce marketplace, while also helping people buy bitcoin with a credit card and help sellers exchange bitcoin for savings on Amazon purchases.
  • April 28, 2105: Bitcoin has gone B2B. Global bitcoin exchange MonetaGo launched this week and said its closed beta operations support trade in more than a dozen currencies across the globe. The exchange, the company said, is particularly applicable to cross-border B2B payments.
  • April 29, 2015: Coinbase, the U.S.-based digital currency startup, announced that it is expanding its presence into the U.K. The international expansion allows the startup to bring its Coinbase Exchange that allows users to trade bitcoin, as well as the ability to buy/sell bitcoin using the Coinbase wallet.
  • April 29, 2015: Intercede, a cybersecurity-focused firm announced that Ledger, a bitcoin security solution provider, has agreed to use Intercede’s MyTAM security solution to help protect bitcoin wallets on Android devices.
  • April 29, 2015: Bitcoin companies are giving back. The BitGive Foundation, ChangeTip and BitPay are all working to help support relief efforts in Nepal following the massive earthquake.
  • April 29, 2015: Sweden’s Nasdaq exchange has said yes to bitcoin. The exchange has approved a bitcoin-based exchange traded note to allow investment into the digital currency for those who don’t want to directly own them.
  • April 29, 2015: Bitcoin Shop, a publicly traded bitcoin services firm, has teamed up with Spondoolies-Tech, a mining hardware manufacturer, under one brand.
  • April 30, 2015: The German bank, Fidor Bank, which is a supporter of bitcoin, is expanding its operations toward the U.K.
  • April 30, 2015: CEX.IO, an international bitcoin exchange, has expanded into the U.S. and allows customers in 23 states to use the service.
  • April 30, 2015: Credit unions may soon team up with bitcoin exchanges, according to a new report from Mercator Advisory Group, which cited the competitive international payments services as a perk for the credit union customers.

On the Dark Side …

recent report about CoinDesk’s first quarter shows what many already know about bitcoin: it’s got an increase in the number of wallets, and increased investments, but it’s slowing in one key metric — mainstream growth across all bitcoin-related areas. What bitcoin really needs to go big is major consumer adoption, but the public isn’t there. Merchant adoption of those who accept the digital currency is also stalled. So, will bitcoin ever gain full mainstream support?

  • April 27, 2015: The Nevada Attorney General’s Office and state gaming regulators are going after an online poker site that was ran with bitcoins on the illegal, unlicensed gambling site.
  • April 27, 2015: A bitcoin website that has been blacklisted by the Russian government headed to court this week about gaining access back to their domain.
  • April 27, 2015: Mt. Gox bitcoin holders are still waiting out for payments, but this week the filings continue to come in for those users to collect back roughly 750,000 in bitcoins that were lost.
  • April 29, 2015: Overstock wants to issue $500 million in stock, but using a network like bitcoin, the report said. As the bitcoin-like networks gain support, what will this mean for the future of bitcoin?
  • April 29, 2015: A scam alert was issued about Bitcoin Max Profit, a marketplace that claims consumers can get cloud mining and pay funds into a mining pool to see returns. The site claims to use trading bots and payout daily, but it’s reported to be a bitcoin scam.
  • April 29, 2015: Off-chain bitcoin transactions were featured in an op-ed about the volatility of using such a transaction. The transaction where a bitcoin from one person to another (without any exchange) and isn’t recorded. They can be used for efficient business transactions, but the piece warns about the risks behind the type of transactions.
  • April 30, 2015: The Bitcoin Foundation has started another debate. The new executive director, Bruce Fenton, has suggested that Satoshi Nakamoto, a founding member of the foundation, be removed from the list of members.






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