Silk Road founder wants his $33M in Bitcoins back

Ross Ulbricht, who is under prosecution for his involvement in underground website Silk Road, says the US government has no right to seize his Bitcoins, arguing that confiscation was illegal.

Bitcoin Silk Road founder wants his $33M in Bitcoins back

Bitcoin is already gaining mainstream acceptance, with retailers, e-commerce service providers and individuals already using the crypto-currency as a means of exchange. However, the virtual currency may still be tainted by its supposed illicit use in connection with underground web services such as Silk Road, which the FBI alleges to have been used to facilitate criminal activities, including assassination orders or attempts and the sale of illegal drugs.

In a raid earlier this year, the FBI seized assets and accounts owned by Ross Ulbricht, reported to have been the founder of Silk Road, and this included at least 173,000 BTC, then valued at about 33.6 million (as of publishing, Bitcoin is valued at about $700:BTC1).

Ulbricht has previously denied wrongdoing, and has claimed that authorities wrongfully arrested him, effectively claiming the crypto-currently stash was not his. In a recent statement, however, Ulbricht has filed legal papers in a Manhattan court claiming he “has an interest as owner” of the Bitcoins, adding that the electronic money should be returned to him, as it is “not subject to seizure” by federal law.

This will set a precedent, as the value of Bitcoin as an asset that can be seized by authorities has not been challenged before. Lawyers cited by the New York Post say that the courts are not likely to agree to Ulbricht’s arguments, as virtually “anything of value” — real property, bank accounts, artwork, and even domain names — can be seized in money-laundering cases. Given that Bitcoin does have value (whether inherent or determined by the market) makes it likewise a possible — and legal — target for seizure.

Whichever way the argument goes, it only goes to highlight Bitcoin’s increasing value as both a currency and a tradable commodity, although it has implications as to the privacy afforded by the crypto-currency. Still, the fact that Bitcoin has been allegedly used for illicit activities does raise questions over its viability in the long run, especially if it is often under scrutiny for potential misuse.

Source: NY Post

J. Angelo Racoma has written extensively about mobile, social media, enterprise apps and startups. Angelo develops business case studies for Microsoft enterprise applications and services. He is also co-founder at WorkSmartr, a small outsourcing team.