What, if anything, was the benefit to Ross Ulbricht surrendering his Bitcoin wallet to the Feds?
Ross Ulbricht, Bitcoin, Lyn Ulbricht, Silk Road, Civil Asset Forfeiture
Ross Ulricht has surrendered his claim to 144,336 BitCoins, or what amounts to nearly $50 million to the Federal government through their civil asset forfeiture program. Bitcoin News conducted an interview with Ulbricht’s attorney, Paul Grant, over the phone. You can read the full interview here.
Grant started off the interview by stating that “It’s over. This part of Ross’ struggle, his fight, is over.”
But what exactly did he agree to, and why? From my take of reading the interview, I don’t really have a clear answer beyond the claim that he did so to remove this part of his struggles so he could concentrate on the business of attempting to overturn, or at least vacate the heavy-handed two-life term sentence given to a man for allegedly running a website.
In the ‘agreement,’ it appears that Ulbricht is not only surrendering his bitcoins, about $48 million worth, but he is also surrendering any further potential future litigation regarding this special arrangement. The $48 million dollars, the agreement states “shall be credited in PARTIAL satisfaction of the money judgment.”
Now, given this fact, what is perplexing to me is how this agreement really settles this matter for Ulbricht. All it really did was remove a bargaining chip, if you will for Ulbricht in the future. How much, exactly, is that money judgment?
In a memo on Thursday (editor’s note: article date is May 28 2015) , government prosecutors imposed a money judgement against the Ulbricht equal to $183,961,921. They came to that number based on the transactional records from Silk Road showing the amount of illegal drug sales as $182,960,285 combined with the transactions for fake identification equal to $1,001,636.
Ulbricht still has looming over him a $130+ million tab to the government, a figure that hardly shows how Ulbricht has put this part of his struggle behind him. The daunting money judgment is still upon him.
You can find the full court record here. The key part of this ‘agreement’ is here.
WHEREAS, the parties have agreed to resolve their respective claims on the terms set forth below;
IT IS HEREBY STIPULATED AND AGREED, by and between the United States of America, through its attorney, Joon H. Kim, United States Attorney for the Southern District of New York, Christine I. Magda, Assistant United States Attorney, of counsel, and Ross William Ulbricht (“Ulbricht”), by and through his counsel, Paul Grant, Esq., that:
- Ulbricht hereby withdraws his Verified Claim to the defendant in rem Bitcoins filed on December 12, 2013, and the Verified
- All right, title and interest in the Defendant Funds are hereby forfeited to the United States, and shall be disposed of according to law.
- The sum of $48,238,116.04 shall be credited in partial satisfaction of the Money Judgment.
- The forfeiture of the Defendant Funds shall constitute full and complete satisfaction of the United States’ claims in this Action against Ulbricht, and for any and all other civil claims that could have been brought against Ulbricht in relation to the facts alleged in the
- Ulbricht is hereby barred from asse1iing any civil claim against the United
States or any of its agents and employees (including, without limitation, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service, and the United States Attorney’s Office for the Southern District of New York) concerning, arising out of, or resulting from the filing of this Action, including without limitation that Ulbricht is a prevailing party or that Ulbricht is entitled to attorney fees.
Ulbricht and the United States hereby waive all rights to appeal or to otherwise challenge or contest the validity of this Stipulation and Order.
Each party shall bear its own costs and attorney fees.
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, released a press release on this ‘agreement’ in which the government announced the terms of the ‘deal.’ The bitcoins were retrieved from Ulbricht’s laptop computer. Ulbricht obviously surrendered his bitcoin wallet to the Feds for them to be able to retrieve those bitcoins.
In the press release, (you can read the full press release here)
Kim stated, “Ulbricht was found guilty in 2015, after a jury trial, of distributing narcotics, distributing narcotics by means of the Internet, conspiring to distribute narcotics, engaging in a continuing criminal enterprise, conspiring to commit computer hacking, conspiring to traffic in false identity documents, and conspiring to commit money laundering, in connection with his operation of the Silk Road underground website.”
Let me de-gov that statement for you and put it in the language of the real:
Some dude was able to create an anonymous portal that enabled people to exchange stuff with one another without our being able to track who was selling and who was buying what. As could be expected, people selling drugs saw the portal as an opportunity to voluntary exchange value. As we have been using the criminalization of drugs to control certain segments of society, we found this portal to be a potential threat to our ability to target the people we need to target.
In addition to that, the fact that this dude created a portal which could potentially enable anonymous transactions, be they for drugs or anything else, is completely unsat. We have to make a very visible, powerful example of this man to encourage any other person or people from ever attempting to do what this man pulled off.
Be sure you read my article on why anonymity is such a fundamental threat to nation-states.
Given all this, I ask you, when Paul Grant, Ulbricht’s attorney says, “It’s over. This part of Ross’ struggle, his fight, is over,” does that gibe with the facts I have given to you? I hardly think this part of Ross’ struggle is over, unless there is something that we are not being told that Ross might benefit from surrendering $48 million worth of Bitcoin to the state, a state that will most assuredly use the money to buy toys to hurt more people with.
From the article in Bitcoin News:
Readers wondering why Mr. Ulbricht would cooperate in such a manner, especially considering the extremity of his sentence, his attorney stresses how “Ross needed to get this behind him. He has so many other battles at the moment, not least of which is appealing to lessen his time.”
“Ross agreeing to settle this case makes it go away,” Mr. Grant emphasized. “He has too many other battles to fight at this point, battles to find some way to recover his liberty.”
When asked if Mr. Ulbricht’s concession might gain him preferable consideration in higher courts, Mr. Grant answered, “Absolutely not. Not even in the slightest. What this does is free up resources and energy for the larger picture.”
Now, whether that statement is indeed true or not is another matter. I am hoping the statement is not true. If it’s not, I perfectly understand why the attorney would be motivated to strategically make what I hope turns out to be a false statement. I would like to believe that Ulbricht got something out of the ‘agreement.’
The timing of this agreement is odd, given that it comes just a day after it was revealed Ulbricht was to be moved to a prison in Colorado that houses some of the most dangerous, the most violent felons in the US Prison system.
There are so many questions that remain unanswered in what appears, at least to us, sudden agreement. Isn’t giving up the bitcoins some level of tacit admission of guilt? Has Ross Ulbricht surrendered? The attorney assures the public that they haven’t given up. And if you know Ross’ mother, Lyn Ulbricht, as some of my friends actually do, you know he has a support group behind him that is determined and committed to do whatever it takes to free Ross Ulbricht.
I don’t doubt that Ross has not surrendered, but I am not sure, unless there is something else going on behind the scenes that we couldn’t, maybe even shouldn’t know (at least those of us who would like to see Ross freed), that surrendering bitcoins does anything to end any part of his legal troubles.
By my reckoning, Ross Ulbricht is a political prisoner, whose crime is creating anonymity, for which he must pay, and he must pay not just to the fullest extent of the law, but as beyond the extent of the law as possible without kicking up too much backlash from the general public that might see their draconian treatment of Ross a potential risk to their own future well-being.
And yes, you SHOULD see this case as demonstrating a risk to your own future well-being should you decide to make, to create something that threatens the myth of the large-scale nation state, that without it we would be lost, hopeless, unable to function.
Well, the myth is crumbling, despite their best efforts to hide this truth from us. Silk Road was just one short-lived demonstration of just how out-of-date, how impractical the large-scale nation state truly is, and for that, Ross Ulbricht has paid, and continues to pay. Today, he paid nearly $50 million.