The Curious Case of the Silk Road

One of the more interesting cases concerning internet business (though not the kind we normally work with) concerns the arrest this week of Ross Ulbricht, who operated the Silk Road site. Silk Road was an online marketplace for many items, but was most famous for trading illegal drugs. Ulbricht was charged with trying to pay a member of the site to kill another member who threatened to expose some of the users.

The case brings in other interesting web phenomena as well. Silk Road users paid with Bitcoin, an online currency which has been criticized for being highly speculative. In fact, the currency took a dive with the news of Ulbricht’s arrest, as the U.S. Government was able to actually confiscate his Bitcoins.

Finally, most members of Silk Road communicated through Tor, a “darknet” service that allows full anonymity to its users. Tor and other darknet services have been a thorn in the side of all digital rights management issues, since they open a path for fully anonymous and thus unaccountable sharing of copyrighted material. It is also a very useful tool for journalists, activists, and people in countries with strict internet controls. In fact, Tor was originally created by the U.S. Navy.

The myriad legal issues involved in this one case are fascinating, and we will continue to follow this case with interest.

Los Angeles Times – Ulbricht Arrested

Ottawa Citizen – Bitcoin Crashes

New Yorker Blog – The Full Silk Road Story