US government takes down Silk Road

The US government has taken down Silk Road, one of the most popular "deep web" websites. Silk Road was an anonymous marketplace, primarily used to sell illegal products like drugs. The website was only reachable via the Tor network and one of its most popular currencies was the anonymous Bitcoin. BSN writes the government took down the site by going after its alleged creator. Nicknamed Dreat Pirate Roberts, he took a cut of around US$80 million in commission fees from money that exchanged at Silk Road.

So, they went after the alleged creator of the Silk Road, a guy that went by the user name 'Dread Pirate Roberts'. His actual name is Ross William Ulbricht and at the time of his arrest, he was in possession of 26,000 BitCoins which currently carry a going rate of about $3.5 million (the largest Seizure of BtC to date). This amount of BitCoins still pales in comparison to the sheer amount of volume of transactions that the Silk Road was responsible for. Over the course of the past two years, the Silk Road had over 9.5 million BitCoins change hands which ultimately resulted in the founder raking in about $80 million in commission fees. By the way 9.5 million BtC is approximately $1 Billion, which means hundreds of millions of dollars worth of illegal drugs and weapons likely changed hands every year through the Silk Road.

The takedown of Silk Road had an immediate impact on the value of Bitcoin. As the news hit the wire, the price of a Bitcoin collapsed from US$130 to around US$85 in less than three hours. The price has largely recovered though, at press time a Bitcoin is trading for US$124.71.