The FBI seized the digital black market in the vain hope to reduce recreational drug use and sales. Not only has the FBI shut down Silk Road but they have acquired 26,000 Bitcoins which are worth around $122 each making a total of around $3,172,000. This is a favourable sum of money for a government in financial crisis.
What is going to happen to the $3,172,000 seized?
The burning question is what is going to happen to the $3,172,000 seized from Silk Road? There are reports from FBI agents that the money will be liquidated into US $ or disposed of in the same manner as illegal drugs.
The site, Silk Road, was the largest Bitcoin market place. $1.2 billion has been spent on the website and most of this on illegal drugs. Bitcoin is a digital currency which allows anonymity when making financial transactions online, and continues to be used. Especially on ex-competitor sites of Silk Road, and more sites have sprung up where illegal drugs can be brought online since the closure of Silk Road.
“Members of the FBI, are you more interested in control or in justice?”
Ironically previous customers are now donating to the FBI. Microdonations worth a fraction of a penny are being sent to the FBI’s Bitcoin wallet, but that is not all that is being sent. With any Bitcoin transaction the payee can attach a message. These are streamed for public view online, and are stored forever in “blockchain”, the public history of all Bitcoin transactions. This is how previous customers are voicing their opinions of what they think of the site being shut down. One example is, “Members of the FBI, are you more interested in control or in justice?” A more tongue-in-cheek message with serious undertones reads, “Yo dawg I heard your government is losing $300 million a day. Maybe 0.0001 Bitcoins will help you out a little bit.” Attaching messages to transactions to make a political statement is apparently a tradition.
Shutting down sites like Silk Road may increase NHS expenses
If people are going to buy recreational illegal drugs they will always find a way of doing this. The site sold better quality goods (higher purity) than what is usually found on the streets, which is all too often cut with chalk or talcum powder or other substances to bulk it out. The site was free of violence, and the products had been rated by other consumers; the same cannot be said for street drugs. Shutting down sites like Silk Road may increase NHS expenses and healthcare costs as people will seek out other sources of drugs. Closing down the site will not help those who need treatment for drug abuse, nor will it deter people from seeking out drugs. If the government really wants to help this war on drugs it needs to focus on the gangs and drug traffickers which is where the drug related violence, drug mules and dangerous contaminants are found.
The site used the digital currency Bitcoin which is usually untouchable by the government, and does not have the same tax as fiat currency. Could this be another motivation for shutting down the site?
In an interview with Forbes (14th August, 2013) owner of the site, Ross Ulbricht stated, “We don’t allow the sale of anything that’s main purpose is to harm innocent people, or that it was necessary to harm innocent people to bring it to market. For example, anything stolen is forbidden, counterfeit money and coupons which are used to defraud people, hitmen aren’t allowed, and neither is child pornography.”
From this is seems that the FBI closed down one website that was causing no trouble at all, when the real trouble is out on the streets where their time and resources would be better spent. This is a cowardly way of fighting the war on drugs, a war which will never be defeated by prohibition.