[video] Quick Take: FBI Bites on Bitcoins
NEW YORK (TheStreet) -- Ross Ulbricht, founder of Internet drug trafficking site Silk Road, was busted by the FBI on Wednesday.
TheStreet's Debra Borchardt added that the Federal Bureau of Investigation seized 26,000 Bitcoins, equaling roughly $3.6 million dollars at the time.
The digital currency, hailed as "beyond the reach of law enforcement," is supposed to be untraceable and non-hackable, she said. That made it desirable for many users and is the reason why the site used it as its payment method.
Bitcoins started off as a test, but as it has gained popularity, many have started to openly trade the currency, causing its value to soar in a relatively short period of time.While the FBI knows Bitcoins are not illegal, they are oftentimes used for illegal activities because of their privacy. Which is exactly why Ulbricht was arrested and charged for drug trafficking, money laundering and computer hacking for running the Silk Road Web site. After the news broke about the arrest and shutdown of the site, Bitcoin values plunged 20%, as perhaps others feared what could happen to them, Borchardt concluded. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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