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Ross Ulbricht, pardoned by Donald Trump, was a pioneer of crypto-crime

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2 months ago

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There cannot be many international crime leaders inspired by “The Princess Bride”, a cult children’s fantasy movie released in 1987. Ross Ulbricht, the founder of the Silk Road, the very first dark-web drug-trading network, certainly was. When users signed up for the website, which went live in 2011, they were greeted by a message from the founder, “Dread Pirate Roberts”, the hero of the film, explaining how the site worked. Shielded by Tor, which hides website servers, and using bitcoin to make payments, users could order all manner of goods and services without revealing personal information.

The combination of the two technologies, Tor and cryptocurrency, allowed the creation of something like an Amazon Marketplace, only for illegal drugs. Users could anonymously order parcels to their homes, without ever having to encounter a scary drug-dealer in person. Dread Pirate Roberts was its delightful outlaw organiser. Until, of course, in 2013 the Silk Road was shut down by FBI agents and Mr Ulbricht, then 29 years old, was arrested in the science-fiction section of a San Francisco public library. In 2015, after a four-week trial, he was convicted of various offences and sentenced to life in federal prison. And that is where he sat until January 21st, when Donald Trump pardoned him.

“The scum that worked to convict him were some of the same lunatics who were involved in the modern day weaponisation of government against me,” wrote Mr Trump on his social-media platform, Truth Social. The president, who has mused about executing drug-traffickers, said that two life sentences were a “ridiculous” punishment. He was also honest about his reason for the pardon. It was, he said, in honour of America’s libertarian movement, “which supported me so strongly”.

The pardon exemplifies Mr Trump’s brand of transactional politics. He originally promised to commute Mr Ulbricht’s sentence at the Libertarian Party’s national convention last May. In exchange, many of the party’s supporters voted tactically for Mr Trump over their own candidate in November. Promises made, promises kept. And yet the way in which Mr Ulbricht’s cause was taken up by libertarian voters is also revealing. As Dread Pirate Roberts, he represented a type of internet anarchism that has, with the rise of cryptocurrency, grown hugely influential.

Mr Ulbricht was caught because of a stupid mistake—he posted his own email address using an account he had used to promote the Silk Road. And yet in the case against him, prosecutors suggested he was also a violent criminal who had paid a hitman to take out an informer. What they did not reveal was that the supposed hitman was in fact a Drug Enforcement Administration agent, Carl Mark Force IV, who was using his knowledge of the case to extort bitcoin from Mr Ulbricht. The informer and his murder were fake. Mr Force and another agent, Shaun Bridges, later pleaded guilty to corruption offences.

Mr Ulbricht’s supporters use this to argue that their man was unfairly punished. According to a commentary posted on the “Free Ross” website, which operates with the support of his family, Mr Ulbricht “is a peaceful first-time offender”. Or as Angela McArdle, the chairwoman of the Libertarian National Committee, put it after his release, Mr Ulbricht was a “political prisoner”, and “one of our own”. The Silk Road, she argued, was a libertarian project, all about “economic independence”.

That is a stretch. When Mr Ulbricht was arrested, the government seized 144,000 bitcoin he had accumulated in commission on drug trades, then worth around $30m (and rather more now). He may not have killed anyone, but Mr Ulbricht was arguably the first serious cryptocurrency criminal. The Silk Road was to organised crime a little like what Napster was to the music industry. Had he not been caught, Mr Ulbricht would plausibly be a billionaire by now.

Nowadays, not only are dark-web markets still thriving, but bitcoin is also used as a means of money-laundering for more offline drug-dealing. Ransomware, a type of extortion dominated by Russian crime groups, would be impossible without it. “Cryptocurrency is foundational to modern cybercrime,” says Jamie MacColl of the Royal United Services Institute, a British think-tank. In “The Princess Bride”, Dread Pirate Roberts is revealed to be more than one man. The moniker shifts from one pirate to another. Mr Ulbricht is free again. But he is no longer Dread Pirate Roberts; now they are everywhere. ■

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Economics

Will Elon Musk’s cash splash pay off in Wisconsin?

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2 hours ago

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March 31, 2025

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TO GET A sense of what the Republican Party thinks of the electoral value of Elon Musk, listen to what Brad Schimel, a conservative candidate for the Supreme Court of Wisconsin, has to say about the billionaire. At an event on March 29th at an airsoft range (a more serious version of paintball) just outside Kenosha, five speakers, including Mr Schimel, spoke for over an hour about the importance of the election to the Republican cause. Mr Musk’s political action committees (PACs) have poured over $20m into the race, far more than any other donor’s. But over the course of the event, his name came up precisely zero times.

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Economics

German inflation, March 2025

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6 hours ago

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March 31, 2025

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Customers shop for fresh fruits and vegetables in a supermarket in Munich, Germany, on March 8, 2025.

Michael Nguyen | Nurphoto | Getty Images

German inflation came in at a lower-than-expected 2.3% in March, preliminary data from the country’s statistics office Destatis showed Monday.

It compares to February’s 2.6% print, which was revised lower from a preliminary reading, and a poll of Reuters economists who had been expecting inflation to come in at 2.4% The print is harmonized across the euro area for comparability. 

On a monthly basis, harmonized inflation rose 0.4%. Core inflation, which excludes food and energy costs, came in at 2.5%, below February’s 2.7% reading.

Meanwhile services inflation, which had long been sticky, also eased to 3.4% in March, from 3.8% in the previous month.

The data comes at a critical time for the German economy as U.S. President Donald Trump’s tariffs loom and fiscal and economic policy shifts at home could be imminent.

Trade is a key pillar for the German economy, making it more vulnerable to the uncertainty and quickly changing developments currently dominating global trade policy. A slew of levies from the U.S. are set to come into force this week, including 25% tariffs on imported cars — a sector that is key to Germany’s economy. The country’s political leaders and car industry heavyweights have slammed Trump’s plans.

Meanwhile Germany’s political parties are working to establish a new coalition government following the results of the February 2025 federal election. Negotiations are underway between the Christian Democratic Union, alongside its sister party the Christian Social Union, and the Social Democratic Union.

While various points of contention appear to remain between the parties, their talks have already yielded some results. Earlier this month, Germany’s lawmakers voted in favor of a major fiscal package, which included amendments to long-standing debt rules to allow for higher defense spending and a 500-billion-euro ($541 billion) infrastructure fund.

This is a breaking news story, please check back for updates.

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Economics

First-quarter GDP growth will be just 0.3% as tariffs stoke stagflation conditions, says CNBC survey

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7 hours ago

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March 31, 2025

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U.S. President Donald Trump speaks to members of the media aboard Air Force One before landing in West Palm Beach, Florida, U.S., March 28, 2025. 

Kevin Lamarque | Reuters

Policy uncertainty and new sweeping tariffs from the Trump administration are combining to create a stagflationary outlook for the U.S. economy in the latest CNBC Rapid Update.

The Rapid Update, averaging forecasts from 14 economists for GDP and inflation, sees first quarter growth registering an anemic 0.3% compared with the 2.3% reported in the fourth quarter of 2024. It would be the weakest growth since 2022 as the economy emerged from the pandemic.

Core PCE inflation, meanwhile, the Fed’s preferred inflation indicator, will remain stuck at around 2.9% for most of the year before resuming its decline in the fourth quarter.

Behind the dour GDP forecasts is new evidence that the decline in consumer and business sentiment is showing up in real economic activity. The Commerce Department on Friday reported that real, or inflation-adjusted consumer spending in February rose just 0.1%, after a decline of -0.6% in January. Action Economics dropped its outlook for spending growth to just 0.2% in this quarter from 4% in the fourth quarter.

“Signs of slowing in hard activity data are becoming more convincing, following an earlier worsening in sentiment,” wrote Barclays over the weekend.

Another factor: a surge of imports (which subtract from GDP) that appear to have poured into the U.S. ahead of tariffs.

The good news is the import effect should abate and only two of the 12 economists surveyed see negative growth in Q1. None forecast consecutive quarters of economic contraction. Oxford Economics, which has the lowest Q1 estimate at -1.6%, expects a continued drag from imports but sees second quarter GDP rebounding to 1.9%, because those imports will eventually end up boosting growth when they are counted in inventory or sales measures.

Recession risks rising

On average, most economists forecast a gradual rebound, with second quarter GDP averaging 1.4%, third quarter at 1.6% and the final quarter of the year rising to 2%.

The danger is an economy with anemic growth of just 0.3% could easily slip into negative territory. And, with new tariffs set to come this week, not everyone is so sure about a rebound.

“While our baseline doesn’t show a decline in real GDP, given the mounting global trade war and DOGE cuts to jobs and funding, there is a good chance GDP will decline in the first and even the second quarters of this year,” said Mark Zandi of Moody’s Analytics. “And a recession will be likely if the president doesn’t begin backtracking on the tariffs by the third quarter.”

Moody’s looks for anemic Q1 growth of just 0.4% that rebounds to 1.6% by year end, which is still modestly below trend.

Stubborn inflation will complicate the Fed’s ability to respond to flagging growth. Core PCE is expected at 2.8% this quarter, rising to 3% next quarter and staying roughly at that level until in drops to 2.6% a year from now.

While the market looks to be banking on rate cuts, the Fed could find them difficult to justify until inflation begins falling more convincingly at the end of the year.

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