Get All Access for $5/mo

Alleged Creator of Silk Road Detained Without Bail At a bail hearing in a Manhattan courtroom on Thursday, a federal prosecutor revealed that Ross William Ulbricht allegedly ordered the murders of six people, and that more than 450,000 bitcoins of his personal fortune are still unaccounted for.

By Brian Patrick Eha

Opinions expressed by Entrepreneur contributors are their own.

Ross William Ulbricht, wearing a green prison uniform and with shaggy brown hair, showed little visible reaction as Magistrate Judge Kevin Fox announced today that he would be detained without bail in advance of his criminal trial.

On a back bench of the Manhattan courtroom, Ulbricht's mother, Lyn, embraced family members. "That's so unfair," she whispered.

Ulbricht and his private defense counsel, Joshua Dratel, departed through a side door, leaving Lyn and others to face a handful of reporters in the hall. "He certainly should have been granted bail," she told the press.

Twenty-nine-year-old Ulbricht is the alleged creator of Silk Road, a Bitcoin-fueled online black market for illegal drugs, fake IDs and even contract murder that was shuttered by federal authorities in early October, when Federal Bureau of Investigation agents also apprehended Ulbricht in San Francisco. In siding with the prosecution, Fox appeared to have been swayed by allegations that Ulbricht had operated "a huge online drug empire" like a cartel boss, ordering the deaths of six people and using sophisticated techniques to evade capture by authorities.

Since being transported earlier this month to New York City, where an agent from the FBI's cybercrimes division swore out the criminal complaint that led to his arrest, Ulbricht has been held in the high-security Special Housing Unit of the Metropolitan Detention Center in Brooklyn. He has been kept from using the inmate email system.

Related: Another Score for Bitcoin: You Can Now Use It to Pay for College

At issue on Thursday was whether Ulbricht would make bail. His family and friends had pledged assets of more than $1 million to secure his release. In a letter sent to the judge prior to the bail hearing, of which has obtained a copy, Dratel argued that Ulbricht's character and concern for his family's livelihood would keep him from making any attempt to flee. "Individuals from all aspects and time periods of Mr. Ulbricht's life affirm that his reliability and integrity have been constants throughout his life," Dratel said in the letter.

At the hearing, however, Dratel was unable sufficiently to counter the claims made by the prosecution. He complained that he had received crucial documents from prosecutors only the evening before.

A prosecutor from the U.S. Attorney's Office for the Southern District of New York described for the judge how, in forensic analysis of Ulbricht's laptop, the FBI had discovered "an extensive journal" detailing the creation of Silk Road. Agents also found spreadsheets showing Ulbricht's net worth and recording various transactions, along with entries for "SR Inc.," valued at $104 million, the prosecutor said.

More lurid was the allegation that Ulbricht had ordered the murders of six people, only two of whom had been previously mentioned in court documents. The hitman he used for the first attempted murder-for-hire, the prosecutor said, was an undercover federal agent, who accepted payment of $80,000 and provided staged "proof" of the hit. The target was a former Silk Road employee who Ulbricht allegedly feared would rat him out to the authorities.

In ordering this first killing, Ulbricht steeled himself for the possibility that violence might become a permanent feature of his criminal empire, the prosecutor said. "I would like the experience in case this ever happens again," Ulbricht told the undercover agent whom he believed to be a hitman, according to the prosecutor.

Indeed, the attempted killings didn't stop there. Later, Ulbricht paid a supposed hitman $150,000 to kill a blackmailer, according to a Maryland district court indictment against him. That hitman reported back that the target, under interrogation, fingered an accomplice. But there was one problem: The accomplice lived with three other people. If he were killed outside the home, Ulbricht wouldn't be able to take possession of his drugs and money. Better to kill all four people and split the booty 50/50, the hitman urged.

"Hmm okay I'll defer to your better judgment," Ulbricht is said to have told the hitman. He allegedly provided half a million dollars in bitcoins as payment for the quadruple murder.

Related: Bitcoin Hits New All-Time High Ahead of Hearings

It's worth noting that so far, authorities have not uncovered any actual murders in connection with these attempted contract killings. At this time, it's unclear whether the evidence is yet to be found, or whether the supposed hitman was swindling his client. It may be that no blood was shed. But Ulbricht still had the intent to kill, the prosecutor argued Thursday, and that makes him a dangerous man.

Finally, there is the matter of Ulbricht's digital wealth. Of the 600,000 bitcoins that he allegedly earned in Silk Road commissions, the FBI has seized some 144,000. Ulbricht may have spent the rest, or he may have stashed them in other digital wallets, the prosecutor said. If so, he would have access to a fortune upon release that could finance a life on the run.

Dratel, when it was his turn to speak, sought to counter the government's depiction of Ulbricht as a drug lord. Ulbricht has no prior criminal history, he pointed out. His family has rallied around him. He was not himself directly involved in buying or selling drugs. And as for the murders-for-hire, Dratel said, you can't judge real intent from online chats.

"If he's supposed to be this criminal mastermind that they're alleging," he would have run after Department of Homeland Security agents interviewed him at his home in July about a shipment of fake IDs, Dratel said.

He conceded that restrictions could be placed on Ulbricht's activity as part of the terms of his release. One condition might be no computer usage. His family would help to ensure that he complied. According to the letter Dratel sent to Fox, Ulbricht's parents were prepared to relocate to New York to stay with their son for the duration of the trial.

But that wasn't sufficient for the government. "It was worth $730,000 to him to kill a witness" and blackmailers, the prosecutor said.

In the end, Fox was convinced that Ulbricht "[had] the means to flee," along with a sophistication that made him dangerous. He gave his ruling; and in the back row, Lyn's shoulders sagged.

Related: 3 Big Misconceptions About Bitcoin

Brian Patrick Eha is a freelance journalist and former assistant editor at 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.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Science & Technology

How Generative AI Is Revolutionizing the Travel Industry

GenAI won't displace travel agents; instead, it will enhance their efficiency, enabling them to focus on crafting tailored experiences that resonate with travelers on a deeper level.

Business News

Mark Cuban's Google Account Was Hacked By 'Sophisticated' Bad Actors

The "Shark Tank" star said someone "called and said I had an intruder and spoofed [Google's] recovery methods."

Business News

Target Teams Up With Shopify To Give Online Small Businesses Brick-and-Mortar Shelf Space

Target has an online Amazon competitor marketplace, and it's taking applications from small businesses now.

Starting a Business

5 Steps to Move Beyond Small Talk and Start the Business You've Always Dreamed of

Make your business idea a reality by following these five no-nonsense steps.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Set Your PC-Using Employees Up with Windows 11 Pro for $25

This updated operating system features top-of-the-line security, AI support, and more.