On the afternoon of October 2, 2013, the FBI conducted a meticulously-planned operation to capture someone they considered to be one of the most-dangerous criminal kingpins in the world. The operation didn't go down in a South American jungle, a Mexican compound or behind the walls of gated Miami mansion. The operation went down in the science fiction section of a San Francisco public library. Also, unlike most global kingpins, the FBI's target might not have ever touched a gun or a drug in his life. But he did touch a computer keyboard. And with that keyboard he allegedly launched and maintained the internet's largest illicit marketplace, Silk Road.
FBI agents had been following their target for months. This unassuming kingpin rented a room in an apartment across the street from a coffee shop where he conducted most of his business under the username "Dread Pirate Roberts." He lived with two people he met through Craigslist. They knew him as "Josh." He paid his rent every month on time in cash.
On this particular October afternoon, the FBI knew "Josh" would likely be setting up shop at his local library instead of the coffee shop. Sure enough, they followed their target to the library where at around 3:15pm he proceeded to boot up his laptop. Agents were trained to wait for "Josh" to enter his password for the laptop and for him to log into his email and social media accounts. When the signal was given, two undercover FBI agents – a male and a female – began to have a fake lover's quarrel a few feet away. As the fake lovers yelled at each other, a team of agents swooped in to arrest "Josh." An agent grabbed the unlocked laptop and handed it over to a senior IT technician. The IT tech immediately changed all of the computer's admin passwords.
Now in handcuffs, agents read the 29-year-old target his rights. "Josh's" real name?
According to the FBI's charging documents, Ross founded the Silk Road marketplace in February 2011. He operated under the username "Dread Pirate Roberts," which was a reference to a fictional character from "The Princess Bride."
The Silk Road soon grew into the largest "dark net" illicit drug marketplace. Sort of like an eBay if you wanted to buy cocaine, ecstasy, weapons… or even a hit man. Users accessed the site using a technology called Tor. When someone uses Tor, their IP address (geographic location) is encrypted several times over then routed all over the world to dozens of locations, allowing them to be totally anonymous and untraceable.
All transactions were paid with bitcoin. Silk Road took a 10% cut of every transaction.
Over its short life, Silk Road processed $9 billion worth of transactions. And with each and every one of those $9 billion worth of transactions, a little slice of Bitcoin was set aside for Ross Ulbricht.
In August 2014 Ulbricht was charged with money laundering, conspiracy to traffic narcotics and conspiracy to commit computer hacking. Prosecutors also alleged that Ulbricht paid $730,000 to have several associates murdered.
On February 4, 2015 Ulbricht was convicted on every single count. On May 29, 2015 he was sentenced to two lifetimes in prison plus 40 years, without the possibility of parole. He is currently serving his sentence at a federal prison in Tuscon, Arizona. He was also ordered to pay $180 million in judgments.
Over the course of his time running Silk Road, Ross Ulbricht manage to collect 144,000 bitcoins as payment for processing those $9 billion in transactions.
On the day of his arrest in October 2013, the price for a single bitcoin was $121. Therefore, at the time of his arrest Ross was worth around $17.4 million.
On the day of his conviction in February 2015, the price of bitcoin was $220. At that level, Ross' 144,000 coins were worth $31.7 million.
For his sanity, I really hope Ross doesn't have a way to check the price of bitcoin from prison.
Earlier today (Friday February 19, 2021), the total market cap of bitcoin crossed $1 trillion for the first time. That happened when the price of bitcoin jumped above $53,000 for the first time a few hours ago.
At the price I'm seeing right now, $55,500, Ross Ulbricht's 144,336 coins would be worth =
Technically, $8,010,648,000. And that's where I'm leaving it because in the hour I've spent writing this article, the price of bitcoin has jumped over $1,000, forcing me to come back and update these numbers three times.
If Ross was out of prison and still had access to his 144,000 coins, he would be the 335th richest person in the world.
He would be about $400 million richer than George Soros. Around $500 million richer than Ralph Lauren. Around $600 million richer than Steven Spielberg.
What Happened To Ross Ulbricht's Bitcoins?
At least a portion of Ulbricht's bitcoin account was seized by federal agents.
In a bizarre twist that no one saw coming, a Baltimore secret service agent involved in Ross' capture was himself arrested and in 2017 sentenced to six years in prison for stealing some of Ross' bitcoins.
In mid-2014 the United States Marshals service conducted nine auctions for 30,000 worth of Ross' coins. All nine auctions were won buy venture capitalist Tim Draper. In total, Tim paid $19 million for 29,657 bitcoins.
At today's prices, Tim's stash is worth =
In November 2020, another 69,000 of Ross' bitcoins were seized by the US Department of Justice working with the IRS' criminal investigations unit. Those 69,000 coins had actually been stolen from Ross by a hacker in 2012 and 2013. As of this writing, the government has not conducted an auction of this stash of coins which have a market value of =
I can't track what happened to the roughly 45,000 remaining coins outside of the two seizures above. Those $2.5 billion worth of coins are likely sitting in wallets that haven't been found yet or have been hacked and sold off. Or maybe they were sold off by the government. It was difficult to track down exactly how many of the 144,336 coins were seized and sold by U.S. Marshals.
I'm not sure what to feel about Ross Ulbricht. A lot of people believe he was framed or that the charges were greatly exaggerated. If he actually paid to have people killed while operating the Silk Road, he is probably serving a fair sentence. If that didn't happen and he was somehow a patsy for another nefarious individual or group of individuals, then this is a terrible overreach of justice.
Ross' parents spent years quietly lobbying to have their son pardoned by Donald Trump. Those attempts were not ultimately successful.
Nearly 400,000 people have signed Ross' Change.org petition seeking clemency, which you can check out at freeross.com/petition
I encourage you to read the info on his petition page. Here's the opening paragraph which I believe was written by his mother:
My son, Ross Ulbricht, is a first-time offender serving a double life sentence without parole, plus 40 years, for a website he made when he was 26 years old and passionate about free markets and privacy. Ross―an Eagle Scout, scientist and peaceful entrepreneur―had all non-violent charges at trial. He was never prosecuted for causing harm or bodily injury and no victim was named at trial.
This is a sentence that shocks the conscience.
Innocent or guilty, can you imagine what Ross must feel today? He walked out of his apartment one day with a net worth of $17 million and a thriving online business. Today he's a 36-year-old federal prisoner who might technically still be a multi-billionaire. And how tortuous it must be to know what could have been had he maybe escaped to South America before that fateful day in October 2013. What would his life be today with a slightly different roll of the dice.