A $3 Billion Silk Road Seizure Will Erase Ross Ulbricht’s Debt

Ross Ulbricht, the convicted creator of the legendary Silk Road dark web market for drugs, has never gotten much mercy from the US legal system. In 2015, he was sentenced to life in prison without parole. His appeal was denied, as was the pardon he sought from President Trump. But a little over a year ago, it appears Ulbricht finally got a break of a different kind: The nine-figure debt he owed to the US government as part of his sentence will be erased—all thanks to the fortuitous hoarding of a hacker who'd stolen a massive trove of bitcoins from his market.

Last year, prosecutors quietly signed an agreement with Ulbricht stipulating that a portion of a newfound trove of Silk Road bitcoins, seized from an unnamed hacker, will be used to cancel out the more than $183 million in restitution Ulbricht was ordered to pay as part of his 2015 sentence, a number calculated from the total illegal sales of the Silk Road based on exchange rates at the time of each transaction. Despite the fact that the more recently unearthed stash of bitcoins—now worth billions of dollars—was itself criminal proceeds, the Justice Department appears to have made a deal with Ulbricht to avoid any claim he might have made to the money: In exchange for Ulbricht's agreement to waive any ownership he might have of the bitcoins, a portion of them will be used to pay off his restitution in its entirety.

"The parties agree that the net proceeds realized from the sale of the [bitcoins] forfeited pursuant to this agreement shall be credited toward any unpaid balance of the Money Judgment," reads a court filing from last year, using the phrase "money judgment" to refer to Ulbricht's 2015 restitution order. The document, filed in February of 2021, is signed by both Ulbricht and David Countryman, a prosecutor in the asset forfeiture unit of the US Attorney's office for the Northern District of California. The Department of Justice didn't respond to WIRED's request for comment.