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Alleged Founder of Silk Road Pleads Not Guilty, Will Stand Trial in November

Alleged Founder of Silk Road Pleads Not Guilty, Will Stand Trial in November
Ross Ulbricht

In a Manhattan courtroom Friday afternoon, Ross William Ulbricht received his trial date: Nov. 3.

Clean-shaven, wearing a navy blue prison uniform and with close-cropped hair, Ulbricht looked a different man from the one whose picture has been circulating for the past four months as the alleged founder of online black market Silk Road. And indeed, he pleaded "not guilty" to all charges. Those charges, which were detailed in a formal indictment Tuesday, are one count each of narcotics trafficking conspiracy, computer hacking conspiracy, money laundering conspiracy and engaging in a continuing criminal enterprise.

At the arraignment on Friday, Judge Katherine B. Forrest settled the issue of how and when the prosecution would turn over to Ulbricht's lawyer, Joshua Dratel, the evidence against his client. The bulk of this evidence comprises all the data from servers belonging to Silk Road and from Ulbricht's personal laptop, seized when he was arrested in San Francisco on Oct. 1 of last year.

By Feb. 13, Dratel will provide the U.S. Attorney's Office with drives sufficient to hold eight to 10 terabytes of data, the approximate size of the volume of evidence which the prosecution said it may use in court. By Feb. 27, two weeks later, the prosecution must return the drives with the relevent materials loaded onto them. The defense will then have two months to come to grips with the evidence before telling the judge what motions he expects to file in relation to it.

Ulbricht may be allowed to look over the material himself on a computer at the Metropolitan Detention Center in Brooklyn in order to aid in his own defense. After all, he knows the contents of his laptop better than anyone. When asked by Judge Forrest whether this would happen for certain, however, Dratel said the decision was out of his hands.

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As for the trial date, Judge Forrest had the winter holidays on her mind. "We'll want to get done if we can before the Christmas holiday, because then we lose the jury for a few days," the judge said. She told the attorneys to "block [out] four to six weeks" on their calendars for the trial, but admitted Thanksgiving would probably interrupt the proceedings for a few days.

Speaking to a scrum of reporters outside the courtroom after the arraignment, Dratel put to rest the reports in recent weeks that Ulbricht was considering a plea bargain, and was possibly even cooperating already with the government to take down former Silk Road employees -- three of whom were arrested in December. He attributed the reports to "a misunderstanding of certain language in what the government filed."

While refusing to say whether or not the government did offer a plea bargain, however, Dratel noted that he is legally required to bring any offers to his client for consideration. "To the extent that creates delays, that creates delays," he said.

According to court documents, along with a personal journal and information related to Silk Road, the prosecution also seized 144,336 bitcoins from Ulbricht's laptop, an amount worth $104.6 million at current prices. Last month, in a related civil case, a judge ordered the forfeiture of some 29,655 bitcoins taken from Silk Road itself.

The forfeiture order remains pending against the fortune in bitcoins seized from Ulbricht's personal computer, to which he claims rightful ownership. But they, too, will be fair game if the government can convincingly link them to Silk Road.

Asked how Ulbricht can claim not to be Dread Pirate Roberts, the notorious administrator of Silk Road, while asserting ownership of the huge cache of bitcoins found on his laptop, Dratel drew a distinction between the Silk Road bitcoins and Ulbricht's personal wealth.

"He made no claim to the bitcoins on the server," Dratel said. "And as we know, it's not illegal to have bitcoins."

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Brian Patrick Eha is a freelance journalist and former assistant editor at Entrepreneur.com. He is writing a book about the global phenomenon of Bitcoin for Portfolio, an imprint of Penguin Random House. It will be published in 2015.

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