BitcoinBusiness

Moderator of Silk Road Spinoff AlphaBay Sentenced to 11 Years in Prison

Colorado resident Bryan Conner Herrell has been sentenced to 11 years in prison for moderating disputes on the now defunct darknet marketplace AlphaBay. 

AlphaBay formally launched on December 22nd, 2014, a month after the Silk Road was shut down by the FBI and Europol. It allowed the sale of similar items to the Silk Road, such as illicit narcotics. However, it also expanded the platform to include the sale of firearms and stolen data. AlphaBay eventually grew to be the world’s largest online drug marketplace with over 400,000 users and an estimated total revenue of over $23 million before it, too, was taken down in July of 2017.

As a moderator, Herrell went by the pseudonyms “Penissmith” and “Botah”. His primary responsibilities included settling over 20,000 disputes between vendors and purchasers. He also operated as a scam watcher and was paid in bitcoin for his services. After pleading guilty to racketeering back in January, Herrell has now been sentenced to 11 years by District Court Judge Dale A. Drozd.

Does the Punishment Fit the Crime?

The punishment of operators and moderators of darknet markets has historically been severe. Most notably, Ross Ulbricht received life in prison after being convicted on 7 counts of operating a continuing criminal enterprise. Michael Santos, a reformed drug trafficker who served 26 out of a 45 year sentence and now works as an American prison consultant, commented on Ulbricht’s conviction:

A life sentence is ridiculously harsh. Our nation made a commitment to mass incarceration decades ago. From my perspective, it is the greatest social injustice of our time. The life sentence imposed on Ross Ulbricht is certainly possible as the law is written, but that doesn't make the life sentence right. It's far too harsh.

In an unsealed transcript, Judge Katherine Forrest explained her reasoning for the unusually harsh judgement by stating she hoped that it would act as a deterrent for other would-be internet narcotraffickers. 

However, research shows that Ulbricht’s sentencing had the opposite effect. In a study published by the British Journal of Criminology, Sociologist Isak Ladegaard discovered quantitative evidence that the dark market drug trade increased following the news of Ulbricht’s surprisingly harsh sentence.

In his research, Ladegaard found that sales on Agora, another darknet marketplace, more than doubled after the announcement of Ulbricht’s life sentence, from less than $40,000 a day to more than $100,000 a day in just two weeks, with international sales reaching up to $250,000 daily.

Daily volume on the dark market site Agora before and after Ulbricht's sentencing. Source: Isak Ladegaard

Similarly, AlphaBay went on to grow to well over 300,000 listings in 2017. This was an exponential increase from the estimated 12,000 listings the Silk Road had in late 2013. 

It is clear that the 11-year sentence for Herrell was meant to be a deterrent. Upon the announcement, Special Agent in Charge Sean Ragan of the FBI’s Sacramento Field Office stated, “Herrell's sentence sends a clear message to criminals that the darknet is no safe haven for illegal transactions.” 

U.S. Attorney Scott shared a similar sentiment saying, “Operating behind the veil of the darknet may seem to offer shelter from criminal investigations, but people should think twice before ordering or selling drugs online—you will be caught.”

However, historic data indicates that administering unusually harsh punishments as a deterrent rarely has the intended effects law enforcement and judges hope for. 

In 1971, the U.S. led a global campaign on the War on Drugs with the goal of reducing illegal drug trade through the use of drug prohibition, military aid, and military intervention. 50 years later, the Global Commission on Drug Policy deemed this campaign to be a failure with “devastating consequences for individuals and societies around the world” in 2011. The report went on to state, “apparent victories in eliminating one source or trafficking organization are negated almost instantly by the emergence of other sources and traffickers.” 

written by

Andrew Yang is a researcher obsessed with Bitcoin and the Lightning Network.