I don’t think any of us thought that Silk Road was being run from any location in the US. Not if the owner/operator, Ross Ulbricht was smart, anyway. Not that he’s not book smart, he’s got degrees in physics and chemistry, but he was extraordinarily careless in keeping his identity hidden. I don’t know if this was lack of knowledge of how to hide and protect himself from prying eyes (doubtful) or if Ulbricht’s hubris was so great that he thought he couldn’t be traced. The FBI claims that evidence was obtained through monitoring the administrator login and through making purchases through the site, but would any of us be surprised if the NSA had a hand in this?
This would be a fun trial to watch if it weren’t for the side issues of murder for hire, computer hacking, fraud, etc. There are so many privacy and liberty issues tied up in the existence and use of Silk Road, as many of the ‘victimless crimes’ have found a home there. Ulbricht’s defense could probably run something along the same lines as why the creator of BitTorrent has never been prosecuted, except for the minor issues of hiring a hit on someone who was blackmailing him and obtaining a counterfeit identity.
It’s going to be interesting to see what happens to Bitcoin market value over the next few weeks and months. The largest place to spend them is shut down, so the demand won’t be as high, but at the same time tens of millions of Bitcoins were seized so the number of Bitcoins on the market is greatly decreased.