by Jude Ayua

US President Donald Trump has signed an executive order for a full, unconditional pardon of Ross Ulbricht, creator of Silk Road, a dark web marketplace for illegal drugs. A New York court convicted Ulbricht in 2015 for several offenses including drug trafficking and money laundering, and sentenced him to life imprisonment.

On Tuesday, 21 January, Trump announced on his social media, Truth, that he had called Ulbricht’s mother to inform her about her son’s Presidential pardon.

Silk Road’s roots and bitcoin connection

Ulbricht launched Silk Road in 2011 as a digital black market. Silk Road was the first modern day dark web marketplace. Ulbricht operated the market under the alias “Dread Pirate Roberts.” He operated it as a hidden service on the Tor network, allowing the anonymous buying and selling of products and services among users. 

Transactions on Silk Road were conducted using bitcoin (BTC), then an emerging cryptocurrency. Known for its illegal sale of drugs, hacking tools, stolen passports, among other illegal products, the use of BTC aided the protection of users’ information. Silk Road reportedly facilitated sales worth 9,519,664 BTC from February 2011 to July 2013 before its closure.

Ulbricht’s alias is a reference to a character in the 1987 film The Princess Bride. “Silk Road” derived its name from the historic trade routes connecting the eastern world to western and parts of Africa. The site reportedly had close to one million registered users, according to Federal Bureau of Investigation (FBI)’s findings, although they did ascertain how many were active.

Read also: Anticipation of a new pro-crypto administration in the US boosts confidence in crypto—The Block’s Report.

Ulbricht’s arrest and sentencing

In 2013, Ulbricht was arrested in a public library in San Francisco. He was allegedly chatting online with a supposed colleague who was actually an undercover federal agent.

Ulbricht was charged to court and prosecuted on several charges including conspiracy to commit trafficking and money laundering, and computer hacking. The court found him guilty, and in May 2015, he received two life sentences and 40 years imprisonment.

The trial District Judge Katherine Forrest noted that Ulbricht was “no better a person than any other drug dealer.” She said his site, Silk Road, was Ulbricht’s “carefully planned life’s work.” The judge added the lengthy sentence would act as a deterrent to copycats that similar crimes would have “very serious consequences.”

Ulbricht, however, said at his sentencing, “I wanted to empower people to make choices in their lives and have privacy and anonymity.”

Unfortunately, despite the judge’s hope that Ulbricht’s sentence would be a deterrent, after Silk Road’s closure, bigger similar marketplaces still emerged.

Senate Paul’s appeal

President Trump’s announcement of Ulbricht’s pardon came hours after Senator Rand Paul’s letter to the President. Senator Paul described Ulbricht’s sentence as “harsh…for a first-time offender” and “vastly disproportionate to his crimes.” He noted that while Ulbricht received two life sentences, “the worst drug sellers on the site received significantly more lenient sentences.” 

Paul cited the examples of Steven Sadler, who sold over $1 million worth of drugs, but received only five years in prison and four years of supervised release; and Matthew Verran Jones, a top five drug seller on Silk Road, who received barely six years of prison term. 

The Senator emphasized that the biggest drug trafficker on the site, Cornelis Jan Slomp, received only a ten-year sentence, while most drug sellers were free, but Mr. Ulbricht remained imprisoned.

Remarkably, Senator Paul attested to Ulbricht’s character, describing him as “a model prisoner.” Paul wrote:

“Mr. Ulbricht devotes much of his time helping his fellow prisoners by offering classes teaching math, science, and yoga, holding support groups for those coping with substance abuse, and conducting a meditation class to help with the experience of incarceration.”

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Libertarian advocates for Ulbricht

In President Trump’s statement announcing Ulbricht’s pardon, he condemned what he described as “the scum that worked to convict him.” Comparing Ulbricht’s prosecution and his own trials, Trump described them as “the modern day weaponization of government.”

Trump had hinted about his plan to commute Ulbricht’s sentence during a speech at the Libertarian National Convention in 2024, while soliciting their votes in the 2024 presidential election.

The Libertarians consistently advocated for Ulbricht’s release, contending his case was an example of “government overreach.” Libertarian National Committee Chair Angela McArdle commented that “Ross Ulbricht has been a libertarian political prisoner for more than a decade.”

His release has received wide celebration among key political figures and stakeholders within the crypto community. Republican Congressman and Trump ally, Thomas Massie, commended the President’s decision. “Thank you for keeping your word to me and others who have been advocating for Ross’ freedom,” said Massie.

Meanwhile, reports revealed that some federal agents involved in the case were subsequently convicted of corruption. Particularly, two were arrested for stealing six-figure dollars worth of BTC during the investigation.

Significance of Ulbricht’s pardon for crypto

Ulbricht’s case was significant for the cryptocurrency community for unique reasons.

Bitcoin: Although the Silk Road marketplace became widely known for illegal commercial activities, it was a platform for one of BTC’s first major use cases. The case was perceived as a direct target of the cryptocurrency industry. Advocates have argued that the use of BTC for transactions on Silk Road was not different from the use of the US Dollar or other fiat currencies.

Enforcement: With the increased enforcement actions by the US Securities and Exchange Commission (SEC), the crypto community became more displeased with government regulators’ treatment of crypto assets. Reference to cases as Ulbricht’s further showcase the government’s securitization of cryptocurrency.

President Trump’s pardon of Ulbricht is not only a fulfillment of his campaign promise to commute his sentencing, but an acknowledgement of Ulbricht’s role in the early stages of bitcoin and crypto adoption. The pardon also proves the President’s other promises to ease regulatory restrictions within the crypto industry.

Read also: $TRUMP: US President-elect Trump launches meme coin as price skyrocket.

Image credit: Libertarian Party’s national convention in Washington, D.C, May 25, 2024 (Reuters/Brian Snyder)

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com

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