Ross Ulbricht has his freedom. After serving nearly 12 years in federal prison for running a notorious online drugs bazaar, Ulbricht—who went by the name Dread Pirate Roberts when he was a crime lord—received a pardon from President Trump that cut short his life sentence. What he does not have is his fortune.
When FBI agents arrested Ulbricht in a San Francisco library in 2013, they also snatched his open laptop, which allowed them to obtain the huge trove of Bitcoins he had amassed while running his website, the Silk Road.
As part of his criminal sentence, which came after a jury found Ulbricht guilty of drug trafficking and money laundering, the judge also ordered him to forfeit nearly $184 million. To make good on the judgment, the U.S. Marshals Service arranged a series of auctions to sell off over 144,000 Bitcoins belonging to Ulbricht.
In a case of poor timing, the Marshals sold the Bitcoins in early 2014 at a time when the currency had recently fallen from over $1,000 to a modern-era low of near $300. Today, the 144,000 Bitcoins would be worth around $14 billion but, at the time, fetched a little over $48 million, which translates to around $334 each—or less than 0.5% of their present-day value.
Ulbricht filed a legal challenge to the forfeiture but ultimately gave it up in 2017 and waived any claims to the Bitcoins.
One of the biggest beneficiaries of the auctions was venture capitalist Tim Draper who scooped up around 30,000 Bitcoins. Draper later criticized Ulbricht’s sentence as unduly harsh.
The U.S. Justice Department, meanwhile, has since pursued other crypto forfeitures related to the Silk Road. This has included seizing and selling Bitcoin held by corrupt federal agents who stole it during the course of the original investigation, and obtaining a court order this month to sell the thousands the agency seized from an unnamed hacker who also robbed Ulbricht.
A once and future tycoon?
President Trump’s decision to issue a pardon to Ulbricht came after ongoing pressure from his mother, and from Bitcoin-loving libertarians who regarded his sentence as unjust and heavy-handed. The sentence came after prosecutors showed how Ulbricht not only ran a drug empire but attempted to hire a hit man (who turned out to be a government agent) to kill one of his employees, and after parents testified about how their children had overdosed on drugs purchased on the Silk Road.
Ulbricht received a full pardon, not just a commutation, which means he is not only free but his conviction goes away. This raises the interesting question of whether he can claim the U.S. government wrongly seized and sold his property, and seek to get it back.
Under the current state of the law that appears unlikely. While U.S. courts historically adopted the common-law notion that a pardon “blots out the offense,” modern rulings have limited the scope of that. In 1993, the Supreme Court wrote that “although a pardon may obviate the punishment for a federal crime, it does not erase the facts associated with the crime or preclude all collateral effects arising from those facts.”
According to Renato Mariotti, a former federal prosecutor who now works in white-collar defense at Paul Hastings, a pardon undoes the forfeiture of property—unless, as is the case with Ulbricht’s Bitcoin, it has already been sold and the proceeds spent. The upshot is Ulbricht’s onetime fortune appears long gone.
This does not mean, of course, that the 40-year-old Ulbricht will find himself penniless. With the help of his mother, he maintained a social media presence during his incarceration and sold art and NFTs that brought in millions of dollars, though the family at the time planned to use the funds for legal expenses.
There is also the possibility, though there is no evidence to support this, that Ulbricht has other Bitcoin wallets that the FBI did not discover at the time of his arrest.
Fortune sent an email to an address posted on the Ulbricht family’s Free Ross page, asking whether Ulbricht has additional Bitcoin or if he plans to file a legal claim to reverse the forfeiture, but did not receive a reply.
In any event, Ulbricht appears well positioned to build a new fortune. He is a legendary figure in crypto and libertarian circles, and is sure to be in demand on the speaking circuit. Ulbricht has already been the subject of a popular book titled American Kingpin, and is likely poised to sell his story to movie studios.
Meanwhile, the FBI wallet that once held Ulbricht’s over 144,000 Bitcoins currently holds a little over 1 Bitcoin and has a balance of around $129,000. It is unclear what will become of those funds.