Silk Road: an (alleged) $1.2bn business That's one detail which pops out from an FBI complaint against one Ross William Ulbricht, "a/k/a Dread Pirate Roberts, a/k/a "DPR," a/k/a "Silk Road," the defendant," released on Wednesday... Based on my training and expertise, Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today. The site has sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites. The Government's investigation has revealed that, during its two-and-a-half year operation, Silk Road has been used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over a hundred thousand buyers, and to launder hundreds of millions of dollars deriving from those transactions. All told, the site has generated sales revenue totaling over 9.5 million Bitcoins and collected commissions from these sales totaling over 600,000 Bitcoins. Although the value of Bitcoins has varied significantly during the site's lifetime, these figures are roughly equivalent today to approximately $1.2 billion in sales and approximately $80 million in commissions. Clearly the dollar value of sales would have been worth a lot less earlier in that two-year history, around the start of 2011. That is, before Bitcoin exploded. The escrow system Silk Road used to handle Bitcoin payments enabled a "brisk business" and rapid flow of funds, according to the complaint (those commissions incidentally were 8 to 15 per cent) ... The government further alleges that Ulbricht - a 29 year old physics graduate with an apparent interest in the video output of the Mises Institute - had about $3.4m worth of bitcoins in his Silk Road account in July, having controlled the site's sale proceeds. Which does bring up the question of what the US government is going to do with 26,000 bitcoins that have been seized. Meanwhile, here's one of the more bizarre allegations in the US complaint - that Ulbricht arranged the murder for hire of someone threatening to expose vendors and customers: Even more bizarrely - Canadian police later told the FBI there was no record of any such killing. Related link: I'm waiting for my UPS man - n+1