Operator of 'Silk Road 2.0' Likely Avoided Prison by Cooperating with Feds

Meanwhile, Ross Ulbricht has to spend life in prison without parole.

Ross Ulbricht, convicted of various crimes associated with launching the dark web site Silk Road, was sent away in 2015 for life without chance of parole. In his case, the government purported to believe that websites that allow people to exchange bitcoin for illegal objects are so damaging, so heinous, that justice demanded nothing less.

Yet after the original Silk Road was taken down in late 2013, the idea of a website that allowed the anonymous exchange of bitcoin for the mailing of possible contraband lived on under many guises, including one explicitly called "Silk Road 2.0." Law enforcement took that one down too in late 2014.

One of the site's alleged operators was Blake Benthall, who reportedly used the pseudonyn "Defcon." Benthall was charged very similarly to Ulbricht, as the Justice Department crowed at the time, with "one count of conspiring to commit narcotics trafficking…one count of conspiring to commit computer hacking…one count of conspiring to traffic in fraudulent identification documents…and one count of money laundering conspiracy."

Vice reports, based on a document the site obtained last week, that Benthall got a much better deal that involved simply paying off back taxes:

"If the defendant [Benthall] fully complies with the understandings specified in this Agreement, he will not be further prosecuted criminally by this Office for any crimes, except for criminal tax violations," relating to operation of Silk Road 2.0, the document, signed by an Assistant United States Attorney, reads….

The document says that if Benthall fully complies, "no testimony or other information given by him (or any other information directly or indirectly derived therefrom) will be used against him in any criminal tax prosecution." It adds that he shall file accurate tax returns for 2013 and 2014—the years he helped run Silk Road 2.0—and that he will pay back taxes due to the Internal Revenue Service.

The last entry in the docket of Benthall's case dates from 2015. The U.S. Attorney's Office for the Southern District of New York, which handled Benthall's prosecution, declined to comment. One of Benthall's attorneys also declined to comment.

Others involved in the Silk Road 2.0 arrests got jail time, though no sentences were nearly as severe as the message-sending test case of Ulbricht's life without parole. Vice did not describe the specific nature of Benthall's cooperation.

It almost seems that the U.S. justice system isn't sincere or consistent when it comes to what a heinous danger to society it represents to have a man who did nothing but facilitate the safer exchange of money for drugs walk free. If you don't help out the feds, you can never see light as a free man again. If you do, just pay your taxes and everything will be cool. One might suspect the U.S. justice system works more to protect its own interests than justice or the safety of the citizenry.

A recently lauded study from the National Bureau of Economic Research looked at the effects of cell phone adoption on drug-sales-related murders. It concluded that separating drug transactions from the need to control physical space makes illegal drug sales less dangerous to the people involved and to society at large. Silk Road furthered that separation magnificently, thus making drug sales safer.

For that, Ulbricht will spend his life in prison. For piggybacking on that innovation, plus cooperating with law enforcement, Benthall just has to pay his tax bill.