When charges were announced against Mr. Ulbricht in October 2013 and the website was shut down, the authorities called Silk Road “the most sophisticated and extensive criminal marketplace on the Internet.” 
 
 Several thousand drug dealers and other vendors used the site from January 2011 through its closing to sell hundreds of kilograms of illegal drugs and other illicit goods to more than 100,000 buyers, according to charges filed in Manhattan. 
 
 The site generated over $213 million in revenue during that period, and Mr. Ulbricht, operating under the pseudonym Dread Pirate Roberts, took millions of dollars in commissions, federal prosecutors in Manhattan charged. 
 
 Much of Silk Road’s allure to buyers and sellers was anonymity: The website operated on a hidden part of the Internet, out of the glare of law enforcement officials, and transactions were made in Bitcoins, which can be as hard to trace as cash. 
 
 Mr. Dratel, the defense lawyer, argued during the trial that his client was not Dread Pirate Roberts, the name of a character in the book and movie “The Princess Bride.” He conceded that Silk Road had been his client’s idea, but that Mr. Ulbricht had turned the website over to others before being lured back as a “fall guy” to be arrested. 
 
 Mr. Ulbricht was convicted on Feb. 4 of multiple counts; four of the charges, including distributing narcotics on the Internet and engaging in a continuing criminal enterprise, carry potential life sentences. He is to be sentenced on May 15. 
 
 At the trial, the government also accused Mr. Ulbricht of commissioning the murders of five people whom he saw as threats to his enterprise. Although the prosecutors said they found no evidence that anyone was harmed, they cited the murders for hire as evidence that Mr. Ulbricht was willing to use violence to protect his lucrative operation. ||||| In February, after a trial that lasted 13 days, Ross Ulbricht was convicted of running the online drug marketplace Silk Road, which utilized the digital currency bitcoin for its payments. The media coverage of the trial, and the final result, could be seen as bad for bitcoin. It fed into an image that many in the public still have of the currency: that it is unsafe, and is used for crime. 
 
 But while Ulbricht was the most prominent case thus far and is the reigning symbol of bitcoin’s darker uses (he even had the ominous alias “Dread Pirate Roberts”), a different defendant pleaded guilty to bitcoin-related crimes two months earlier than him: Charlie Shrem. 
 
 Shrem was no shadowy figure, operating in the dark. He was a known name and an early advocate in the bitcoin community. In 2011 he founded the bitcoin exchange BitInstant, which had a range of legitimate investors, including the Winklevoss brothers. But in January, 2014, he was arrested (in dramatic fashion, at New York’s JFK Airport) and, last April, charged with failing to report suspicious banking activity, laundering money from BitInstant accounts (some $1 million) for use by Silk Road customers, and operating an unlicensed money-transmitting business. 
 
 That latter charge is significant moving forward, as the New York Department of Financial Services is currently still at work revising BitLicense, its proposed set of regulations that will govern bitcoin businesses that are transmitting money on behalf of others. The Times wrote that Shrem, “has come to symbolize the government’s crackdown on the virtual currency,” but in fact, there has been, for now, very little crackdown, though some bitcoin supporters worry that it is on the way in earnest. 
 
 While the salacious headlines that follow the prosecution of a bitcoin entrepreneur are unquestionably a negative for the community, some in that world see the prosecution itself as a positive sign. “Silk Road and [other crimes] are obviously a negative, but there’s a silver lining in the sense that when people do bad things and think they can do it because it’s in bitcoin, and they get arrested, there’s a message there that you’ll still get caught,” says Tyler Winklevoss. “What I take away from it is that traditional law enforcement tactics and measures are working, even in the bitcoin world. Technologies aren’t good or bad, they’re neutral. People use email for bad things, people use U.S. dollars for bad things.” 
 
 Shrem pleaded guilty to a reduced charge of aiding and abetting an unlicensed money transmitting service, and was sentenced in December to two years in prison. Today, the 25-year-old reports to USP Lewisburg, in Lewisburg, Penn. It is a high-security federal prison, but Shrem will be in the minimum-security satellite camp. (If you suspect that Shrem will have a cushy time of it there, read our exclusive, revealing interview with a white-collar inmate at a minimum-security prison.) 
 
 Since the moment he was sentenced, Shrem has been upbeat about his fate. On the day of sentencing, he tweeted: “Considering I was facing 30 years, justice has been served.” He then added that he was happy the judge in the case “admires my brainpower.” He has claimed as his own the title of bitcoin’s “first felon” and added the phrase to his Twitter bio, in which he also calls himself a “pioneer,” “crusader,” and “dreamer.” 
 
 Last week, Shrem agreed to a phone interview with Fortune, but had to cancel. He has appeared on radio shows and spoken to the press, and discussed his expectations in an extensive blog post from earlier this month entitled, “So, I’m going to prison—reflections from bitcoin’s first felon.” In the post, Shrem writes, “I don’t look for sympathy, I did the crime and I will do the time.” He says that the prison facility where he’s headed “seems like a nice place, it offers outstanding recreational facilities including a walking track; a basketball court; softball fields and exercise equipment.” And on his Twitter account, he has appeared to even relish the imminent experience. On Sunday he posted a countdown (“21 hours until prison…”) and said, enthusiastically, “Follow my twitter when I check in to prison tomorrow! A few people will be running it, will post updates from behind the walls.” 
 
 In Shrem’s blog post, he recounts the many ways he remained involved in bitcoin in the past year, including while he was on house arrest. He served as a consultant to a couple bitcoin companies, made speeches, and met with venture capitalists. He remains a diehard bitcoin believer. It appears extremely likely that he will return to the bitcoin world the moment he emerges from prison. The question is where the technology will be by then, and how much the landscape will have changed—and whether increased regulation to guard against crimes like Shrem’s will have had a major impact. ||||| Products allegedly available through the Silk Road site. (Photo: AP) 
 
 A Secret Service agent and a DEA agent with lead roles in the investigation to take down the Internet drug bazaar Silk Road allegedly stole proceeds from the underground site and hid their booty in offshore accounts. 
 
 Former DEA agent Carl Force, 46, of Baltimore, the task force agent charged with going undercover to communicate online with Silk Road operator Ross Ulbricht, known as Dread Pirate Roberts, allegedly used several online aliases to extort hundreds of thousands of dollars worth of bitcoin from Ulbricht, according to a criminal complaint unsealed Monday. Force is charged with money laundering, wire fraud, theft and conflict of interest. 
 
 Prosecutors also charged Shaun Bridges, 32, of Laurel, Md., a former special agent with the U.S. Secret Service, who allegedly accessed Silk Road accounts using password information from a Silk Road customer service representative arrested in a drug sting. Bridges, who joined the Secret Service in 2009, is charged with wire fraud and money laundering. 
 
 The FBI shut down Silk Road and arrested Ulbricht on Oct. 2, 2013. Silk Road, a dark Web black market that traded in illegal drugs, counterfeit IDs and computer hacking software, required its buyers and sellers to do business in bitcoin, an anonymous digital currency that is difficult to trace. 
 
 A federal jury in New York convicted Ulbricht last month on drug conspiracy charges. Ulbricht, who will be sentenced in May, was also the target of an investigation in Maryland. Force and Bridges worked on the Maryland investigation. 
 
 Prosecutors say Force, in addition to his official undercover identity as "Nob," created several unauthorized online aliases, so he could conduct complex bitcoin transactions to steal from the government and Ulbricht. 
 
 In one transaction, Force, using his second alias, allegedly demanded Ulbricht pay him $250,000 in bitcoin not to disclose information to the government. Posing as a woman named Carla under the alias "French Maid," Force allegedly offered to sell Ulbricht information about the government's investigation in exchange for $100,000 worth of bitcoin. 
 
 Ulbricht paid the money, and Force deposited it into a personal account, IRS Special Agent Tigran Gambaryan wrote in an affidavit. Force allegedly converted some bitcoin to dollars and wired the money to his personal overseas bank account in Panama, the affidavit said. 
 
 Force also worked for and invested $110,000 in the California-based digital currency exchange company CoinMKT while still working for the DEA. The company featured Force in its pitches to venture capital investors as CoinMKT's anti-money laundering and compliance officer. 
 
 E-mails between Force and CoinMKT's CEO indicated that Force planned to stay at the DEA until the bitcoin exchange "hits it 'big time.' " 
 
 "I have a lot of down time at DEA so I am confident that I can handle all that needs to be done regarding Legal and Compliance on a daily basis," Force wrote. 
 
 Prosecutors say Force used his position at the DEA to steal money from accounts at CoinMKT. In one instance, Force allegedly directed CoinMKT to freeze a customer account. He then seized 223 bitcoins worth about $297,000 and transferred them to his personal Bitstamp digital currency account. He then exchanged the bitcoins for dollars and put the money in his personal checking account, court papers say. 
 
 This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah. (Photo: Rick Bowmer, AP) 
 
 Force, who earned about $150,000 a year as a DEA agent, made $757,000 in deposits to his personal bank account from April 2013 to May 2014, court papers show. During that time, Force paid off his mortgage and a government thrift savings loan while investing in real estate and bitcoin businesses, court papers say. 
 
 Authorities arrested Force on Friday. Force, a 15-year veteran, resigned from the DEA in May. He is in jail and will appear in court Thursday for a detention hearing. 
 
 Bridges, the computer forensics expert on the Baltimore investigation, allegedly stole more than $800,000 worth of bitcoin that he controlled during the Silk Road investigation and placed it into an account with Mt. Gox, a digital currency exchange in Japan. Silk Road reported a massive bitcoin theft Jan. 25, 2013, the same day Bridges attended an interview with the Silk Road administrator caught in the sting. 
 
 Bridges allegedly wired the funds to a personal U.S. investment account through nine transfers from March 6, 2013, to May 7, 2013. The final transfer on May 7, 2013, came two days before he personally sought a $2.1 million seizure warrant for Mt. Gox's accounts, court papers say. 
 
 Bridges, who joined the Secret Service in 2009, resigned from the Secret Service on March 18. He surrendered to authorities Monday and was released under pretrial supervision. 
 
 Bridges intends to fight the charges, his attorney Steven H. Levin said. Bridges "had an unblemished career in law enforcement for several years. He maintains his innocence," Levin said. 
 
 A bitcoin logo is displayed at the Inside Bitcoins conference and trade show April 7, 2014, in New York. Bitcoin users exchange cash for digital money using online exchanges, then store it in a computer program that serves as a wallet. The program can transfer payments directly to merchants or individuals around the world, eliminating transaction fees and the need for bank or credit card information. (Photo: Mark Lennihan, AP) 
 
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– What do you do if you're a federal agent who's part of an undercover operation to bust up a booming black-market drug-dealing website? One thing you don't usually do is skim a goodly portion of said site's digital currency into your pockets, but two former federal agents are accused of doing just that during their investigations that eventually led to the 2013 Silk Road sting, USA Today reports. Ex-DEA agent Carl Force and ex-Secret Service agent Shaun Bridges were charged with wire fraud and money laundering in a complaint unsealed today, the New York Times reports. The document for the recent bitcoin probe mentions that both agents were part of a Baltimore-based task force that ended up securing an indictment for Silk Road's "Dread Pirate Roberts," aka Ross Ulbricht. Force, a 15-year DEA veteran who resigned in 2014 when his alleged actions came to light, "stole and converted to his own personal use a sizable amount of bitcoins," the complaint notes, per the Times; he allegedly did so by fabricating online personas, adds USA Today. Bridges allegedly took $800,000 of the investigation's bitcoin under his jurisdiction, dumped it into a Mt. Gox account, then withdrew the funds from the Japanese currency exchange right before he went after the exchange with a seizure warrant; he had been with the Secret Service as a special agent for six years before resigning on March 18. Meanwhile, 25-year-old BitInstant co-founder Charlie Shrem became the first bitcoin felon to report to prison, starting his two-year sentence today at Pennsylvania's USP Lewisburg facility, Fortune notes.