- Prosecutors allege Ross Ulbricht was Dread Pirate Roberts, operator of illegal drug marketplace Silik Road
- Ross Ulbricht admits inventing Silk Road as an "economic experiment"
- But he handed over control to others and denies any involvement in criminal activities
- However, jury takes less than a day to convict Ulbricht of all charges, he now faces life imprisonment
- Ulbricht's mother and defence claim trial was unfair, plan to appeal
Ross Ulbricht has been found guilty of operating online drug marketplace Silk Road, and convicted of all charges against him.
The 30-year-old faces life in prison after a Manhattan jury deliberated for less than a day to convict him of running Silk Road, the dark web drug exchange where deals were paid in Bitcoin.
Prosecutors claimed more than one million drug deals took place on the site, adding that Ulbricht's cut earned him more than 11.8 million in bitcoins.
His defence argued that he had been framed by other Silk Road operators, after setting up the site as an "economic experiment", claiming he was never the Dread Pirate Roberts(the name used by the Silk Road operator, taken from the name of the hero in the filmThe Princess Bride)
However, assistant US attorney Serrin Turnertold the court that Ulbricht would do anything to protect his creation, while FBI prosecutors claim to have caught him operating the site when he was arrested in a San Francisco library in October 2013.
Emails cited by lawyers showed a man prepared to contract out murders to eliminate threats to the marketplace.
Ultimately Ulbricht was convicted of all seven charges against him, including running a criminal enterprise, computer hacking, distributing narcotics over the internet and a number of conspiracy counts.
Following the conviction, US Attorney Preet Bharara said: "The supposed anonymity of the dark web is not a protective shield from arrest and prosecution."
Despite this, defence attorney Joshua Dratel told Sky it wasn't a fair trial, explaining he would appeal.
He added: "It's very disappointing.
"Of course there will be an appeal. We feel confident about the appeal because we believe that there were significant errors during the course of the trial.
"We were limited in our ability to cross examine, we were precluded from calling witnesses to meet evidence that the government provided in the middle of trial."
Ulbricht's mother, Lyn Ulbricht, also claimed the trial was not conducted properly.
"The big bulk of evidence was not allowed to be presented," Sky quoted her saying.
"And evidence that was presented was stricken so the whole picture wasn't presented. That's not fair."
The story so far
Ross Ulbricht did invent online drug marketplace Silk Road, but is innocent of any criminal activity, his attorney claimed on the opening day of the 30-year-old's trial.
His lawyer told the jury the same day that Ulbricht invented Silk Road, but did so as "a kind of an experiment, an economic experiment,"according toForbes.
Attorney Joshua Dratel wasquoted inThe Registersaying: "Ross is not a drug dealer. Ross is not a kingpin. Ross is not involved in a conspiracy."
The trial started in Manhattan with protestors gathered round the court building in support of Ulbricht, whom federal prosecutors accuse of being the Dread Pirate Roberts the alias used by the operator of Silk Road.
He faces a minimum of 20 years in prison if found guilty of one count of running a criminal enterprise.
FBI agents arrested Ulbricht in the science fiction section of San Francisco public library in October 2013, and the prosecution's opening statement said Ulbricht was caught running the site at the time, his laptop connected to the library Wi-Fi.
Ulbricht's defence said he was set up by Silk Road operators, who knew the FBI was onto them and wanted to find a scapegoat.
Prosecutors called 11 witnesses during the trial to testify, ranging from undercover agents to cyber security experts.
FBI agent Jared Deryeghiayan confirmed under cross-examination that he had once believed Mark Karpeles, former head offailed Bitcoin exchange Mt. Gox,to be Silk Road's operator, saying the entrepreneur's motive was to boost the price of Bitcoin to increase the value of his own fortune in the digital currency.
Deryeghiayan went so far as to apply for a warrant to check the Mt. Gox owner's Gmail account to verify his suspicions,according toWired.
Karpeles was subsequently forced to deny he has ever been the Dread Pirate Roberts.
Karpeles issueda denial to his followers on Twitter, saying: "This is probably going to be disappointing for you, but I am not and have never been Dread Pirate Roberts."
Silk Road
Silk Road operated on the dark web, which lies under multiple layers of encryption to make it harder for authorities to track and identify users.
Deals were financed inBitcoin, the peer-to-peer digital currency, which is independent of banks and government, making transactions harder to trace.
Authorities shut down Silk Road when they arrested Ulbricht, but Silk Road 2.0 was born within a month of the original site's collapse.
That site was shut down on November 5 2014, with another man arrested and charged with running the rebooted drug enterprise.
The publicity surrounding the FBI's battle against Silk Road brought up questions about Bitcoin's validity and security as a medium of exchange, and the trial is likely to spark debate again on the matter.
Bitcoin's value was predicted by fans of the digital currency to go up and up during 2014, but in fact plummeted from $940 in January last year to just $319 come last month.
Its fall in value follows thecollapse of Bitcoin exchange house Mt. Gox in February 2014following an alleged hack, while another exchange, Bitstamp, said it lost 19,000 bitcoins or $5 million - at the start of January.
After suspending services to investigate the hack, CEO Nejc Kodric said the firm is doing "better than ever".
In a statement on his website, he said: "Bitstamp is open for business - better than ever!
"We are back open for business with a newly redeployed website and backend systems that are safer and more secure than ever.
"This breach represents a small fraction of Bitstamp's total bitcoin reserves, the overwhelming majority of which are held in secure offline cold storage systems. We can assure customers that any bitcoins held with us prior to temporary suspension of services on January 5th at 9am UTC are completely safe and will be fully honored."
This article was originally published at 10.35am on Monday, January 12, and was updated subsequently to reflect the latest developments of the trial, most recently on 5 February.
