Silk Road Founder Sent To NY To Face Charges

A federal magistrate ordered on Wednesday (October 09) that the alleged mastermind of the Silk Road online drug bazaar be sent to New York to face charges.

Ross William Ulbricht was present in the San Francisco court room, shackled at the ankles, as U.S. Magistrate Court Judge Joseph Spero handed out the decision.

Ulbricht will remain in custody and was expected to be transferred immediately from his California jail to New York, where he is charged with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy.

The Federal Bureau of Investigation arrested Ulbricht on October 01 and accused him of running the Silk Road website, a market place for illegal goods, under the online alias "Dread Pirate Roberts."

Authorities said they seized $3.6 million worth of the bitcoin digital currency, which was used instead of cash or credit cards to complete transactions for drugs and other illegal merchandise.

They also say Ulbricht tried to have someone killed who had threatened to expose the identities of thousands of Silk Road users unless Ulbricht sent him money.

For more than two years, Silk Road allowed thousands of tech-savvy sellers to post ads for drugs and other illegal products, which they shipped to customers through the mail.

Like eBay, which does not permit the sale of illegal products, sellers on Silk Road depended on positive reviews left by their customers in order to maintain good reputations and generate more sales.

Bitcoins, which provide a degree of privacy in online transactions, can be stored in "wallets" kept online or on individual personal computers.

The site also offered tutorials on hacking ATM machines, contact lists for black market connections and counterfeiters, and guns and hit men for sale, according to the charges.

Authorities said Ulbricht's website generated sales of more than 9.5 million bitcoins, roughly equivalent to $1.2 billion dollars. Bitcoin exists solely in cyber form, and some devotees promote it as the future of money. Authorities have stepped up their scrutiny of the virtual currency and its possible connection to money laundering and other illegal activities.

Presented by Adam Justice