Eddie Hughes, a UK Member of Parliament (MP) has suggested the UK should accept local taxes in bitcoin.
Inspired by Ohio’s recent decision to allow bitcoin payment for taxes, he said: “you’re either ahead of the curve or you’re behind the curve, and our country is in an interesting position right now — we need to be seen as a progressive country.”
The Conservative MP, who describes himself as a “crypto enthusiast with amateur knowledge,” says the British government has a duty to educate itself about blockchain technology.
“It just feels like it gets talked about a lot, wherever you go in the UK, and as MPs we have a duty to understand it,” he said.
Speaking to The Express, Hughes advocated the payment of local (council) tax with bitcoin, but hinted that other options should be considered.
“What’s to stop us being able to pay council tax and other bills with bitcoin?”
Hughes was also inspired by the Royal National Lifeboat Institution, which accepts donations in cryptocurrency. Adoption and mainstream understanding remains a concern for Hughes: “it needs to appear like an app that people will use so they can become familiar with it in a safe and secure way.”
The MP says he’d love to trial the scheme in his constituency near Birmingham and strikes an optimistic tone for the future: “We are at a crossroads and we’re about to determine our future – one in which taking the lead in this field could prove very beneficial.”
“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.”
The simple answer is that it can. The SEC may take up to 180 days to deliver an approval or disapproval. If required, they can also extend that period an additional 60 days.
With the VanEck and SolidX proposal submitted in July, the SEC is simply taking as much time as possible to consider all angles.
The SEC has also invited comments on the ETF, suggesting it is taking the review seriously.
The Delay Could be a Good Thing
The SEC is well within its rights to reject the bitcoin ETF proposal. You may remember the Commission rejected nine proposals back in August.
The fact that the SEC is taking the full time period to consider the VanEck proposal is a good sign.
There are pro-bitcoin commissioners involved in the decision, including Hester Peirce who said, “You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto].”
SEC Concerns Remain
Having said that, the SEC still has major concerns over bitcoin ETFs. As the chairman of the SEC recently revealed, there are issues related to theft, market manipulation, custody, and money laundering that need to be addressed before we see an approval.
There is also concern over how ETFs track the price of bitcoin.
The three options include basing the price on crypto exchanges, bitcoin futures, and the bitcoin OTC market.
The SEC is nervous that exchanges are subject to manipulation. They think bitcoin futures are not yet mature enough, and OTC markets are difficult to track.
So there are big hurdles to overcome before the SEC approves any Bitcoin ETF proposal.
It Could Take Years
Speaking after the decision, Hester Peirce warned the crypto community not to place too much weight on the ETF approval.
“Don’t hold your breath. I do caution people to not live or die on when a crypto or bitcoin ETF gets approved.”
2018 was epic. It started with the madness of altcoins rally at the beginning of the year. Followed by massive steps towards bitcoin and crypto mass-adoption made by regulators, large enterprises, and institutional investors.
And it ended with the blood and tears of traders on the streets (we can still hear some of them screaming).
Block Explorer is willing to reflect on the most important events that brought the industry to its current state. So, here are the major crypto announcements that shaped 2018:
1. January: The Perfect Month to Ban Something
Bitcoin price: $14,112 (on the first of the month)
The beginning of January was marked by the huge news splash made by the South Korean government. They unveiled plans to ban anonymous trading on cryptocurrency exchanges over tax avoidance. And sent the police and tax-collecting authorities to their offices.
As a result, the bitcoin price decreased by $2,000.
At the end of the month, crypto was in trouble again, as Facebook decided to ban all ads related to digital currencies. Since Facebook marketing was a major driving force for many initial coin offerings (ICOs), it cut the source of easy promo for many blockchain startups.
2. February: China and Bankers Join Forces Against Bitcoin
Bitcoin price: $10,264
It’s not easy living in China without the freedom of internet browsing, catching up with friends on Facebook or just googling. All of that is restricted by the “Great Firewall of China.”At the beginning of February, the list of undesirable foreign websites was supplemented with bitcoin-related websites to eliminate the financial risks for Chinese citizens.
Next, the head of the Bank for International Settlements (BIS) called bitcoin “a bubble, a Ponzi scheme, and an environmental disaster”. The media went nuts over it, and the more they referred to it in the following articles the more the price of crypto was sliding down, falling as much as 14% in one day.
3. March: SEC has a Crush on Crypto Exchanges. Google Doesn’t
Bitcoin price: $10,433
Some more heartbreaking and uncomfortable milestones for bitcoin and crypto included the U.S. Securities and Exchange Commission (SEC) announcement made in March. They obliged all cryptocurrency exchanges to go through the registration procedure through the agency.
In April, crypto’s misadventures continued. This time the Central Bank of India (The Reserve Bank of India) banned financial institutions from allowing transactions from people’s accounts to bitcoin wallets.
5. May: Goldman Sachs is Going Crypto, “Rich Dudes” are Boiling Over
Although some people were are not happy about it. Including some very “rich dudes” that were on a mission to come up with the most-quoted insult for bitcoin. For instance, well-known billionaire value investor Warren Buffett referred to bitcoin as “rat poison squared,” and Bill Gates, one of the kindest billionaires in the world, labeled it a “greater fool theory”.
But even in spite of all those troubles, crypto was still on a good path to wider acceptance. Or how else could you explain the 25 million crypto wallets registered at blockchain.com?
6. June: Facebook is Stricken by FOMO
Bitcoin price: $7,519
In June it was time for more bad news. It’s never enough in the crypto world. A panic sell-off happened in the first half of the month after Coinrail’s hack announcement. Even though this South Korean exchange was relatively small it led to a rapid 10% drop in bitcoin price.
A couple of weeks later, big news came from Facebook who decided to reconsider the crypto advertising ban. Promoting initial coin offerings was still off the table though.
7. July: Winklevoss Twins Keep Being Stubborn With SEC
Bitcoin price: $6,366
July was relatively calm for cryptocurrencies. Probably because most of the troublemakers were on vacation. But some news was still in the air, including the fact that asset-management heavy-weight BlackRock was looking into crypto assets and another SEC rejection of exchange-traded fund (ETF) proposal filed by Winklevoss twins.
8. August: Too Many Rejections of ETF Proposals
Bitcoin price: $7,634
August was all about ETF proposals, their postponing and rejections. The bitcoin exchange rates struggled at first, but at the end of the month, after the U.S. Security Exchange Commission declined nine bitcoin ETFs, the price of the major crypto remained stable. How resilient is it?
9. September: The First Crypto-Related Company Files for IPO
Bitcoin price: $7,192
Most of September’s announcements were quite positive. First, there was more news about Goldman Sachs jumping into crypto. The company’s chief financial officer Martin Chavez confirmed that the Wall Street giant was working on the development of bitcoin-based derivatives that will be accessible to the bank’s clients.
At the end of the month, one of the leading bitcoin miners, Bitmain, spilled out their intention to run an initial public offering (IPO). And the application for the process was already filed. Bitcoin Cash prices (one of the assets Bitmain is mining) surged up to 20% rapidly.
10. October: Happy birthday, Bitcoin. Here’s Your Mass-Adoption
Bitcoin price: $6,619
More happy news to celebrate the ten-year anniversary of Bitcoin’s whitepaper. Big steps from institutional investors happened in the middle of October when Fidelity Investments announced the launch of a spin-off company, dedicated to crypto assets exclusively. The new firm named Fidelity Digital Assets was onboarding its first clients and still preparing for the grand opening for the general public in 2019.
Also, the launch of the first blockchain phone, made by HTC, stole the headlines in October.
11. November: Blood, Sweat, and Tears of Bitcoin Cash Fork
Bitcoin price: $6,427
Fights over the Bitcoin Cash fork got completely out of control. The battle between BCHSV (Satoshi Vision), lead by Craig Wright, aka Fake Satoshi and BCHABC (Adjustable Blocksize Cap), driven by Roger Ver, previously labeled as Bitcoin Jesus was observed by the entire industry. It triggered huge crypto volatility, increased trading volume and, as some experts might say, a bitcoin nosedive to a new bottom. And we are still in the middle of that roller coaster.
“People should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.”
That was Ross Ulbricht’s vision when he launched the Silk Road, but it soon turned from a utopian ideal to the world’s most notorious dark-web marketplace. What emerged was an “anonymous amazon.com” attracting drug dealers across the planet, all transacting in bitcoin.
It drew mainstream media attention to bitcoin and cryptocurrency, but ultimately the website was shut down, leading to the arrest and imprisonment of Ross Ulbricht, a 34-year-old now serving a double life sentence plus 40 years without parole.
But this story is not straightforward. It’s a story of drugs, aliases, corruption, conspiracy, and the dark web.
Outlined below are the many twists and turns on the road to justice (or injustice). Rebecca Campbell reports:
The Beginnings of Silk Road
Launched in February 2011, the Silk Road website, created by American Ross Ulbricht, was envisioned to be a “free-market economic experiment” that focused on user anonymity.
Using two key pieces of technology, bitcoin and Tor – a network of computers that makes it impossible to trace by routing internet traffic through servers by anonymizing IP addresses, Ulbricht believed that“people should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.”
However, while counterfeits, weapons, pedophilia and anything that could be used to defraud or harm others were prohibited, what could be listed for sale was left open to interpretation.
As time went on many vendors began to realize that Silk Road was a safe haven for the sale of drugs. Of course, while Ulbricht may have envisioned an open market platform driven by the community, it wasn’t long before it started to gain the attention of the media.
“The Underground Website Where You Can Buy Any Drug Imaginable”
In June 2011, shortly after it was launched, an article was published on Gawker. Titled The Underground Website Where You Can Buy Any Drug Imaginable, the exclusive report detailed how Silk Road enabled people to buy drugs of any kind – cannabis, weed, hash, ecstasy – and that it was like Amazon, “if Amazon sold mind-altering chemicals.”
At the time, however, while many embraced Silk Road and what it stood for, others believed that it would tarnish the emerging cryptocurrency, bitcoin, attracting the attention of the federal authorities.
Unsurprisingly, it wasn’t long before an American politician called for federal authorities to shut down Silk Road. Not long after the Gawker article was published, Senator Charles Schumer called for the Drug Enforcement Agency (DEA) and the Department of Justice to shut the site down now that it had become public knowledge.
At the time, Schumer said in a report to NBC New York: “It’s a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It’s more brazen than anything else by lightyears.”
He also added that “I’d bet my bottom dollar in this instance [an investigation] is underway.”
Who is Dread Pirate Roberts?
The person operating the site did so under the pseudonym Dread Pirate Roberts, named after a character in the 1973 novel The Princess Bride.
The name is often used to refer to Ross Ulbricht, but that’s not entirely accurate. There’s good evidence to suggest that Ulbricht handed over the site to someone else, and that person is the Dread Pirate Roberts.
Ulbricht Reportedly Sells Silk Road
With the website growing, Ulbricht initially turned to Richard Bates, a college friend, who had studied computer science and was working for PayPal and eBay. According to a court transcript filed in 2015, Bates offered help with the site but distanced himself over concerns with law enforcement.
Over time, Ulbricht turned to an anonymous person he met through the site who eventually took control of it.
This person then operated under the pseudonym Dread Pirate Roberts (DPR).
In a 2013 Q&A interview with Forbes, Dread Pirate Roberts confirmed that he was not the original owner, confirming that Ross Ulbricht had sold the site.
DPR spoke about how the torch was passed to him from Ulbricht and that Ulbricht was fairly compensated for the site. The interviewee mentioned that he had discovered a major vulnerability in Silk Road and that while Ulbricht ignored him at first, DPR eventually got his trust.
Back in 2011, Ulbricht is reported to have told Bates that he had sold the website to someone and that it was no longer in his hands to shut down.
In was in 2012, that Dread Pirate Roberts first announced his screen name on the site, which, would become the main point of interest for the authorities.
If Not Ulbricht, Who Else Could Be Dread Pirate Roberts?
French-born Mark Karpeles, former-owner of the now-defunct Mt. Gox Bitcoin exchange, was, at one time, a suspect in connection with Silk Road.
Karpeles ran a DNS registrar and a web hosting company during the time the Silk Road launched, and it was this connection that aroused suspicion.
“I believe since KARPELES has used his [email addresses redacted] to register with a few internet companies that he may have received record of registering, paying for or owning certain aspects of the www.silkroadmarket.org website.”
Mark Karpeles has denied the accusation and the judge in the investigation asked the jury to ignore it because it was based on Der-Yeghiayan “beliefs” rather than hard evidence.
Investigators Went “Rogue”
The case was supposed to be kept as quiet as possible, in order to make sure suspects were not aware of the investigation.
However, information was ultimately leaked to two Baltimore agents – DEA agent Carl Mark Force and Secret Service agent Shaun Bridges.
Bridges then went “rogue,” according to court documents.
As part of their rogue investigation, Bridges and Force hijacked a number of Silk Road accounts and arrested one Silk Road administrator named Curtis Green. At the same time, around $350,000 disappeared from Silk Road vendors, tracing back to Green’s account.
Dread Pirate Roberts heard about the missing money, and turned to another Silk Road colleague, “Nob.” But “Nob” had also been hijacked by Carl Force.
It’s alleged that DPR asked Nob to track Green down and retrieve the stolen money. Green was still in custody at this time, but Force played along, and even pretended to kill him.
In the end, the rogue pair were discovered. Force was sentenced to 6 ½ years. Bridges was initially sentenced to nearly six years in prison; however, in 2017 he was sentenced to an additional two years after admitting to a new crime.
“Has anyone seen Silk Road yet? It’s kind of like an anonymous Amazon.com.”
Alford then tracked everything written by Altoid and eventually found a post where he revealed an email address. Altoid asked for programming advice and gave the address: [email protected]
Of course, with Ulbricht’s email and a plausible explanation linking him to Silk Road, it was only a matter of time before the authorities found him.
The Arrest of Ross Ulbricht – October 2013
Ross Ulbricht was arrested in a San Francisco library while logged in to Silk Road as the Dread Pirate Roberts admin. He was unknowingly talking to an undercover agent at the time.
Why was Ulbricht logged in as DPR even though he had allegedly sold Silk Road and moved on? The defense claims that someone convinced him to briefly get involved again. DPR then gave him access to all accounts, files, software, and records.
When he was arrested on 1st October 2013, all this information was on his laptop, including a bitcoin wallet containing 144,000 bitcoins.
Dread Pirate Roberts Logs On Again, While Ulbricht is Locked Up…
According to Motherboard, “the logical conclusion is that someone else had access to the account that was said to belong to the mastermind of the massive Dark Web drug bazaar.”
It confirmed what many believed: Ross Ulbricht might have started Silk Road, but he wasn’t the only one operating as Dread Pirate Roberts.
Ulbricht Appears in Court
Ross’s first courtroom appearance was in front of Judge Kevin Fox, who ultimately denied his Eighth Amendment right to bail. On the 4th February 2014, Ulbricht was indicted. In another case in front of Judge Katherine Forrest, who had been recommended to the bench by Schumer, she said in her ruling that Ulbricht was acting as a “sort of godfather.”
At one stage during the trials, Ulbricht’s defense lawyer was to call Andreas Antonopoulos, a best-selling author and someone with the technical expertise to explain complex matters, and Steven Bellovin, Computer Science professor at Columbia University and leading expert on computer networking and internet security. However, the court precluded these two experts.
Yet, Judge Forrest was more flexible with the prosecuting side.
Two Life Sentences, with No Possibility of Bail
Before his sentencing, one hundred people who knew Ulbricht wrote to Forrest asking for her to apply the shortest sentence. In a court transcript, it said: “The district court was confused by the letters which showed Mr. Ulbricht to be a different man than the one [Forrest] thought him to be.”
Ultimately, though, Forrest gave Ulbricht two life sentences plus 40 years in prison without the possibility of parole for non-violent charges. In this case, it was not in her power to give him the death penalty.
Following the verdict, even Curtis Green tweeted: “Ross Ulbricht got a raw deal. There is so much more to the Silk Road story than people know, and I can’t yet talk about. I don’t believe Ross is dangerous or that it’s in his character to order a hit on anyone. He should never have gotten that horrible sentence.”
Ross Ulbricht got a raw deal. There is so much more to the Silk Road story than people know, and I can't yet talk about. I don't believe Ross is dangerous or that it's in his character to order a hit on anyone. He should never have gotten that horrible sentence. #FreeRoss
Seven weeks after Ulbricht’s trial, Force and Bridges were indicted for corruption. Compared to Ulbricht’s sentence, though, they got off lightly.
An appeal was filed to a Second Circuit panel consisting of Judges Jon Newman, Gerard Lynch, and Christopher Droney in 2016. However, the Second Circuit judges decided in 2017 to deny Ulbricht’s appeal.
Last December, a petition was filed to the Supreme Court by Williams and Connolly LLP, led by Kannon Shanmugam, who was representing Ulbricht. It was arguing questions on constitutional law, focusing on the impact of the Fourth and Sixth Amendments. The petition was supported by 21 groups. On 28th June 2018, the petition was denied.
The Fight Continues
Silk Road remains a complicated story that has more twists and turns in it than a cheap garden hose.
Corruption, deception, and intrigue are wrapped up in this case. Yet, despite the truth coming out about several of those involved in the investigation, the sentence against Ulbricht still stands.
After five years in prison and unable to communicate with the outside world, Ulbricht is speaking through his family at the @RealRossU Twitter account that was set up in June 2018. The first tweet went out in July. There is also the FreeRoss.org website that has been set up by “friends, family and supporters who are working to free Ross Ulbricht from a barbaric, double life sentence for all non-violent charges.”
A petition, which was launched by his mum, Lyn Ulbricht, has received over 100,000 signatures. The goal is to hit 150,000 as his family seeks clemency for him.
Hi, this is Ross! I’m hoping to find my voice here after all these years of silence. It has been a strange journey, but I’m so grateful for all those who’ve shown love and support and held me up through the hard times. You give me strength. https://t.co/x4m6J3lgha