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A UK Head Shop Owner Would Like His Bitcoins Back from the FBI

The trouble with selling legal items on the darknet.
Image: Zach Copley/Flickr

Peter Ward wants his bitcoins back from the FBI. The Devon, England head shop owner is claiming that 100 out of the thousands of bitcoins seized from the Silk Road raids are lawfully his. That’s because Ward never sold anything illegal on the now-dead narcotics marketplace. That’s right, Wade says the bitcoins—worth about $83,000—are profits from sales of vaporizers, grinders, rolling papers, and a bunch of other completely legal drug related items, according to Forbes.

“I’m probably in a unique position in that I can prove my coins came from selling legal items,” Ward told the magazine. “I sold on Silk Road because it had a large user base that matched my target customers. Where better to sell king-size rolling papers?” Ward’s business, called Planet-Pluto, is billed as “The Best Headshop [sic] On The Darknet!” and it looked just as legit as any Haight-Ashbury drug paraphernalia shop—including the hawking of salvia divinorum joints, and kratom, (legal cannabis-like drugs).

As a result, Ward looks like he’s technically right about being above board. But that didn’t stop the UK’s National Crime Agency from raiding his home in 2013, seizing electronics, the head shop supplies Ward says are legal, as well as small amounts of cocaine and weed. The drugs, Ward claims, were for personal consumption—the coke was a birthday present for himself—and the self-described “psychonaut” hasn’t yet been formally charged by the crown and was released on bail. In the UK, cocaine possession can carry up to seven years in prison, and cannabis up to five years—with unlimited fines possible for both charges.

But, barring any major legal trouble, Ward is still intent on throwing a wrench into the FBI’s Silk Road case, going so far as retaining counsel. The lawyer Ward hopes to hire, Steven Kessler, said that the FBI is required to notify people when they seize assets. It's a requirement that doesn't seem to have been met.

Ward’s claim on the bitcoins is an interesting new ripple in one of the largest online federal drug busts in history. The Silk Road takedown included federal agents seizing 144,336 bitcoins from Ross Ulbricht (aka Dread Pirate Roberts), as well as about 29,000 bitcoins that have yet to be claimed. And recently, the FBI announced plans sell number of the bitcoins in order to retain the cyrptocurrency’s current value (it often fluctuates wildly) of about $12 million, according to Preev. The impressive amount of cash seized likely marks a growing trend: narcotics distribution and sales operations are increasingly not conducted on the streets anymore, but are moving online, according to Dr. Paul Gootenberg.

Although it’s unlikely Ward’s claim on the FBI-held bitcoins is going to make it onto a timeline of Bitcoin’s greatest milestones, it’s clear that the FBI’s seizure of such a large quantity of the cryptocurrency isn’t going to go down without a hitch. And if you’re feeling charitable, Ward, much like Ulbricht, is also trying to raise some cash for his legal fund. In bitcoins, of course.