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Dread Pirate Roberts Supporters Thrown for a Moral Loop

The radical libertarian world was just hit with a bombshell revelation the other day. Previously, the defense team of Ross Ulbricht surprised us by admitting that Ross was the originator of Silk Road, however they claim that Ross left the position after only a few months, handing it off to another entity. This “real” Dread Pirate Roberts, the one who ran the site for the the bulk of the time, eventually went on to drag Ross back in to frame him when he felt the heat from the Feds. Well, now the plot thickens; the defense team is naming a name: long time MtGox operator Mark Karpelès, the one who held the reins when it collapsed and who a lot of people are bitter towards. Furthermore, they have evidence to that end, as a federal agent testified that Mark was their original lead before they went after Ross.

This initially seems like a cause for small celebration. Here is a chance that Ross Ulbricht can be free, or at least substantially reduce the sentence he is liable to receive. But let’s slow down for a second because I think we’ve lost a little moral clarity here. It seems that at a certain point, the focus drifted from supporting the alleged heroic operator of the legendary Silk Road marketplace to supporting one Ross Ulbricht. Only allegedly the same thing, as some libertarians are quick to point out. According to the defense team of our hero Ross, the “real” Dread Pirate Roberts, operator of Silk Road marketplace, is Mark Karpelès. Well, if we’re in this because we support the Silk Road, shouldn’t our support now turn toward Mark?

There are now only two approaches to take with regard to Mark. Either we can be happy he is taking the heat off of Ross or not happy. Suppose we’re happy. This is, after all, a guy who ran MtGox into the ground, caused many people to lose a lot of bitcoin, and, as some suspect, even ran off with a lot of btc himself. Even if we don’t support people going to jail for facilitating drug sales, we can perhaps be content in this sort of poetic justice. If Ross, the human being, is found not guilty or responsible for being Silk Road’s operator, we still of course can cheer that an innocent man is allowed to be free, or have a reduced sentence for his reduced role. But wait – then we’re conceding that the real heroic Dread Pirate Roberts, operator of the legendary Silk Road marketplace, is in fact not a hero. Suddenly we’re happy to see him behind bars. Remember how defensive we were when Ross was charged with soliciting a murder-for-hire? As our focus has turned toward our sympathy for Ross, the human being, we may have forgotten what we originally supported: The idea of a free market pioneer, morally true, despite and even because of complete disregard for the law.

Okay, so suppose we’re willing to forgive Mark the transgressions from MtGox, and not hold it against him in his capacity as the DPR. Suppose the murder-for-hire charge doesn’t apply to him, either. Or maybe he wasn’t the DPR in the first place. In that case, we still don’t have such a cause to celebrate this latest move from Ross’ defense team. It just transferred most of the heat from one innocent man to another. But it’s even worse than that, because now, Ross, our libertarian folk hero, the one who still started the Silk Road, is in fact a snitch who just fingered an innocent man, possibly the heroic real Dread Pirate Roberts. This is not at all to say that I wouldn’t forgive Ross for doing so, nor that I wouldn’t do the same thing under the circumstances. However it does hurt our cause for having supported him in our ideological capacity, and taint the minor hero status that he’d still earned for starting the site and running it a few months. At the very least it may send a mixed message if we continue to support Ross under this favorable view of Mark.

I suppose the best possible outcome, from a libertarian stance, is that Ross knows Mark had nothing to do with Silk Road and the Feds have nothing on him, but Ross’s defense team still uses him to create enough reasonable doubt to set Ross free. Seems a bit of a long shot, though. But really, this is not a great situation in liberty land.

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More Stolen Bitcoin to be Auctioned

2014-11-19-175751_1366x768_scrotFor the second time ever, the US Marshals will auction off stolen bitcoin. The first time this past summer, the US Marshals auctioned of nearly 30,000 BTC that were on the servers of the Silk Road online marketplace. Now, the US Marshals are seeking bidders for 50,000 of the ~144,000 BTC that belonged to Ross Ulbricht.

Ulbricht, as you may recall, has been arrested for allegedly operating the Silk Road marketplace on the Tor network. Forbes reports, “While he has pleaded not guilty to seven drug trafficking, money laundering, computer hacking, and ID theft charges, Ulbricht says he is the owner of the Bitcoin on his computer,” adding “If Ulbricht wins his court case, he will receive the money obtained in the auction. If he loses, the money will go to the Department of Justice’s asset forfeiture fund, Donahue explained.” This process of selling seized property without a criminal conviction is known as civil asset forfeiture, though unlike most instances of asset forfeiture, Ulbricht has been charged with a crime.

By contrast, the Australian government waited to obtain a conviction before announcing they plan to auction seized bitcoin. Coindesk reports, “Australian law enforcement officials are now in possession of 24,500 bitcoins following the conviction of their original owner… Richard Pollard.” Pollard plead guilty to commercial drug trafficking and was sentenced to 11-years in prison. Coindesk adds, “Pollard’s bitcoins are subject to a restraining order and a 28-day appeal period. Should the funds be forfeited to law enforcement officials as expected, the bitcoins will then be sold at auction by the Victoria Department of Justice.” And, like Ulbricht, Pollard allegedly had connections to the Silk Road, though unlike Ulbricht, Pollard was accused of being a seller on the site.

What do these auctions and possible auctions mean for the future of bitcoin? Some people, according to Coindesk, hailed the first US Marshals auction as boosting bitcoin’s credibility. I disagree, though don’t assume I’m saying that the auction of stolen funds diminished the credibility of bitcoin. The fact that at least two government agencies have seized (and one has auctioned) stolen bitcoin does not directly affect the credibility of the items stolen and auctioned. Bitcoin has credibility despite being stolen and sold by governments. Bitcoin has credibility because it can be used as a medium of exchange, and unlike government backed currencies, it is traded voluntarily and without the force of The State (see footnote). Saying that governments give credibility to bitcoin by auctioning ones they’ve stolen, is akin to saying governments give credibility to murder by having hired men commit those actions!

note: The State – capital T, capital S – is a coercive monopoly. The State has monopoly control over the use of coercive violence in a given geographical area.