Operator of Silk Road 2.0, Blake Benthall, arrested yesterday by FBI agents in S

[Carra23]

Bearish. Trade in illicit goods and services is one of the truly unique uses for cryptocurrency. That people involved in the trade seem to be unable to avoid capture casts doubt on the viability of dark marketplaces, and is likely to get their customers to reconsider just how safe they can expect to be.

Trade is not the price driver now. The current price is pure speculative.

Have to see if its bullish or bearish. So far the exchanges are tending to bullish.

[MF Doom]

More and more bitcoins will continue to be removed from circulation for years to come....... Value of these coins will start rising crazy soon!

Assuming demand and all else remains the same...

Demand is low at the moment, and wouldn't this only lessen demand?  I mean now these criminal users have nowhere to spend their bitcoins and no reason to get any more.  So naturally demand will be DECREASING

I personally do not believe I have enough information to make any assumptions about how this will affect demand. On one hand, if illicit activity catalyzes demand to a significant degree, it could hurt demand.  On the other hand, if weary investors or business owners who have been skeptical to enter the market due to concerns over liability regarding anonymous, illicit activity catch word of this news, this may ease their concerns and encourage demand.

It's hard to say in my opinion.

And it seems bitcoin price always moves counter to what you would expect, so in summary, who knows what will happen, just stay optimistic (if your holding) and pessimistic if you want to buy in lower 

[Tzupy]

Quoting from cryptocoinsnews article:

Whenever users deposited bitcoins into their account, they really sent it to an account with three keys, one given to the buyer, the seller, and the site admins.
Obviously, the site admins’ keys are compromised; however, buyers and sellers on these sites will be able to withdraw their bitcoins, or even finish their transactions, without the site admins’ keys.
Since the FBI only controls the site admins’ keys, they can’t seize the bitcoins and auction them.

[riiiiising]

More and more bitcoins will continue to be removed from circulation for years to come....... Value of these coins will start rising crazy soon!

Let me get this straight..

Q: Why use bitcoins?
A: Because they're not controlled by any central authority!

Q: What does this latest silk road bust mean for bitcoin?
A: It's good news! Because a central authority has likely taken many out of circulation, thereby increasing scarcity!

Do you guys ever read back what you're saying? 

[darkmule]

Bearish. Trade in illicit goods and services is one of the truly unique uses for cryptocurrency. That people involved in the trade seem to be unable to avoid capture casts doubt on the viability of dark marketplaces, and is likely to get their customers to reconsider just how safe they can expect to be.

How is that "unique?"  Unique means one of a kind.  If what you're saying is true, there was literally no trade in illicit goods and services before cryptocurrency because that is "unique" to cryptocurrency.

If anything, the nonrepudiability of Bitcoin and other cryptocurrencies makes it, at best, no better for selling illicit goods and services than plain old paper currency, which unlike cryptocurrency, has no memory.

[darkmule]

Q: Why use bitcoins?
A: Because they're not controlled by any central authority!

Q: What does this latest silk road bust mean for bitcoin?
A: It's good news! Because a central authority has likely taken many out of circulation, thereby increasing scarcity!

Do you guys ever read back what you're saying? 

But that's wrong, and you equivocate to make your bogus argument seem correct.  Your first example would be why use BITCOIN.  Not why use "bitcoins."

Bitcoin itself is under the control of no central authority.

However, anyone can use "bitcoins," even a central authority.  That doesn't mean they control the protocol or the currency itself, but that just like anyone else, there is no way to exclude them from being a player in the marketplace.  However you get control of individual units of currency, you are capable of doing with them what you choose.

[NotLambchop]

Bearish. Trade in illicit goods and services is one of the truly unique uses for cryptocurrency. That people involved in the trade seem to be unable to avoid capture casts doubt on the viability of dark marketplaces, and is likely to get their customers to reconsider just how safe they can expect to be.

How is that "unique?"  Unique means one of a kind.  If what you're saying is true, there was literally no trade in illicit goods and services before cryptocurrency because that is "unique" to cryptocurrency.

If anything, the nonrepudiability of Bitcoin and other cryptocurrencies makes it, at best, no better for selling illicit goods and services than plain old paper currency, which unlike cryptocurrency, has no memory.

Good point.  Except for minor difficulties like anonymously delivering paper money to an undisclosed [recipient's] address.

[Raystonn]

Quoting from cryptocoinsnews article:

Whenever users deposited bitcoins into their account, they really sent it to an account with three keys, one given to the buyer, the seller, and the site admins.
Obviously, the site admins’ keys are compromised; however, buyers and sellers on these sites will be able to withdraw their bitcoins, or even finish their transactions, without the site admins’ keys.
Since the FBI only controls the site admins’ keys, they can’t seize the bitcoins and auction them.

Oh great.  In before Lawsky makes multisig wallets illegal.

[LFC_Bitcoin]

Quoting from cryptocoinsnews article:

Whenever users deposited bitcoins into their account, they really sent it to an account with three keys, one given to the buyer, the seller, and the site admins.
Obviously, the site admins’ keys are compromised; however, buyers and sellers on these sites will be able to withdraw their bitcoins, or even finish their transactions, without the site admins’ keys.
Since the FBI only controls the site admins’ keys, they can’t seize the bitcoins and auction them.

Good.

Price rise?

[theblacksquid]

Quoting from cryptocoinsnews article:

Whenever users deposited bitcoins into their account, they really sent it to an account with three keys, one given to the buyer, the seller, and the site admins.
Obviously, the site admins’ keys are compromised; however, buyers and sellers on these sites will be able to withdraw their bitcoins, or even finish their transactions, without the site admins’ keys.
Since the FBI only controls the site admins’ keys, they can’t seize the bitcoins and auction them.

Oh great.  In before Lawsky makes multisig wallets illegal.

I'd love to see them try.

[Raystonn]

This will be an interesting thing to watch.  "What do you mean we can't take the Bitcoins?"  This may be the first test of government being confounded while trying to seize Bitcoins.  Let's see what they do.

[Kontridder]

More and more bitcoins will continue to be removed from circulation for years to come....... Value of these coins will start rising crazy soon!

Assuming demand and all else remains the same...

Demand is low at the moment, and wouldn't this only lessen demand?  I mean now these criminal users have nowhere to spend their bitcoins and no reason to get any more.  So naturally demand will be DECREASING

agoramarket is still alive and it was already the new nr 1 drugs market

[dropt]

agoramarket is still alive and it was already the new nr 1 drugs market

Agora aside, there are at least 15 other darknet markets.

[maker88]

More and more bitcoins will continue to be removed from circulation for years to come....... Value of these coins will start rising crazy soon!

Assuming demand and all else remains the same...

Demand is low at the moment, and wouldn't this only lessen demand?  I mean now these criminal users have nowhere to spend their bitcoins and no reason to get any more.  So naturally demand will be DECREASING

did it lessen last time? and the silk road isnt their only site... theres like 20 of em that do the same thing

[Wary]

Quoting from cryptocoinsnews article:

Whenever users deposited bitcoins into their account, they really sent it to an account with three keys, one given to the buyer, the seller, and the site admins.
Obviously, the site admins’ keys are compromised; however, buyers and sellers on these sites will be able to withdraw their bitcoins, or even finish their transactions, without the site admins’ keys.
Since the FBI only controls the site admins’ keys, they can’t seize the bitcoins and auction them.

So, Cloud 9 and Hydra have multisig and not confiscable, and Silkroad2 while has no multisig, doesn't hold customer's coins on escrow (AFAIK, the admin stopped escrow after a hack). So all they can confiscate is Blake's personal coins only. I hope he have learned from Ulbricht story and keeps them really safe. Maybe he even set some fiat aside for the trial.

[freedomno1]

It's not clear if the feds confiscated any bitcoins, so I can't tell if this is bearish or bullish.

There are definitely some interesting questions
Whether the price will react with an upswing or a downswing on this news
And how much the government payday is ^_^

[adaseb]

Honestly, what did he expect. That it wouldn't get shut down.

I am just surprised he was that old. I was guessing it was run by some 16 year old kid.

[Elwar]

Blake Benthall

[LFC_Bitcoin]

Blake Benthall

S'up Blake, welcome to your new home babe!

[Tzupy]

It seems a sizable amount of bitcoins were seized (how?), quoting from article on Arstechnica:

However, in its investigation of Silk Road 2.0, the government took a different technical tack. In a statement issued by the US Attorney’s Office about the arrest, a spokesperson said, ”During the Government’s investigation, which was conducted jointly by the FBI and [Homeland Security Investigations], an HSI agent acting in an undercover capacity (the “HSI-UC”) successfully infiltrated the support staff involved in the administration of the Silk Road 2.0 website and was given access to private, restricted areas of the site reserved for Benthall and his administrative staff. By doing so, the HSI-UC was able to interact directly with Benthall throughout his operation of the website.”

According to the criminal complaint filed in US Court today, the HSI undercover investigator got in on the ground floor with Silk Road's second incarnation. "DPR2," the original operator of the new site, created a forum to discuss launching a replacement site on a hidden site on the Tor network on October 7, 2013—less than a week after the original site was seized. The undercover investigator was invited to join the forum, and the next day was granted forum moderator privileges; by January 2014, the investigator was a paid staff member, receiving 16 payments in Bitcoins totalling about $32,189 based on current exchange rates.

FBI ARRESTS BLAKE “DEFCON” BENTHALL, ALLEGED OPERATOR OF SILK ROAD 2.0 [UPDATED]
Site is down—arrest nearly a year after feds nabbed Ross "DPR" Ulbricht of Silk Road 1.0.
With that level of authorized access—and with communications directly with Benthall—the FBI and HSI would have been able to gather evidence directly from the site’s server and then use other measures to de-anonymize the individuals associated with it. It’s possible that the investigators may have allowed the site to continue to operate for a period of time to act as a “honeypot” to gain further information about transactions being passed through the marketplace. According to the criminal complaint, "foreign law enforcement authorities" imaged the Silk Road 2.0 server on May 30—which means the site was allowed to continue to operate for five more months while the FBI, HSI, and partner law enforcement organizations gathered data.
That's likely how Irish authorities got information required to stage a drug raid yesterday in Dublin, seizing approximately $200,000 worth of LSD, Ecstasy, and other drugs as well as $18 million in bitcoin. The Irish Examiner reports the raid was the "result of an international drug trafficking investigation into the sale and supply of controlled drugs on an encrypted layer of the internet known as 'the Darknet'."  The operation is part of a broader FBI/Europol operation called 'Onymous," the Examiner reports—"an international day of action to disrupt global activity on the Darknet and remove certain websites and forums is to conclude within the next 24 hours."