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--:-- Sean Rameswaram: Welcome to Today Explained. I'm your host, Sean Rameswaram.
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--:-- Sean Rameswaram: One of the last things President Biden did in his way out of office was pardon his siblings and their spouses. What did they do? We may never know. One of the first things President Trump did on his way back into office was pardon everyone involved with January 6th. What did they do? Everyone knows. But it wasn't just the insurrectionists. Trump also pardoned two dishonest D.C. cops and 23 anti-abortion activists. A lot of these may come as no surprise if you're familiar with the president's politics, but he also pardoned a guy named Ross Ulbricht, known to some dorks as Dread Pirate Roberts. And this is an important moment for everybody, everywhere, who loves freedoms. Ross was the creator of the Silk Road, a dark website where you could score heroin and fentanyl, among other things. That particular pardon doesn't seem to line up with our purported law and order president, So we're going to look into it on Today Explained.
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--:-- Sean Rameswaram: I would like to welcome to the stage 45th president of the United States, Donald J. Trump. Trump went to the Libertarian Conference. And the room's filled with all these people, and they're holding up these Free Ross signs to say Free Ross Ulbricht. A lot of people ask why I came to speak at this Libertarian convention, and, you know, it's an interesting question, isn't it? And everything that comes out of Trump's mouth is met with a boo. Hmm. Whoa. Except for when he says... If you vote for me on day one, I will commute the sentence of Ross Ulbricht. And that was when the room burst into applause and cheers. And so for me, it was like if he was going to win, which I believed he was going to win, then Ross was going to be free. We're going to get him home.
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--:-- Sean Rameswaram: Mick Bilton wrote the book on Ross Ulbricht, a.k.a. Dread Pirate Roberts. He's here to help you understand how Ross landed a presidential pardon a few days ago.
--:-- Mick Bilton: So Ross Ulbricht is a guy who came from Austin, Texas. Upper middle class, very nice, caring family. He was a really sweet kid. You know, there's all these little anecdotal stories about him. One of my favorites of which he was with a friend walking down the street in Austin one day, stops at the flower stall and buys some roses and then hands them back to the woman who works there and then continues to walk. His friend says, well, why did you do that? And he said, because no one ever buys flowers for the person who works at the flower stall.
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--:-- Mick Bilton: He goes off to college and he gets into, not drugs, but, you know, like the stuff we all do, like smoking a little weed and, like, you know, taking some acid or whatever it is. The usual stuff the kids these days do in college. And he also gets into this – he really falls deeply into the libertarian philosophy that the government should have no say in what it is that you put in your body or what you do with your own body, with yourself. If you want to take drugs, you should be able to. You shouldn't go to jail for that. And that the problem with the war on drugs is that it has created a system where people only buy and sell these things in dark alleys and in dangerous places, which has led to so much crime around drugs and so on.
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--:-- Mick Bilton: And that if you legalized all drugs imaginable, you would essentially stop all the harm that happens in society. And if you made it that you could buy these drugs in an Amazon-like forum, people who sold bad drugs that killed people would get bad ratings and you wouldn't buy from them anymore. And the good people that cut their drugs up really nicely would become, you know, the best sellers and so on.
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--:-- Mick Bilton: He learns about this thing called the Tor Onion Browser. And what the Tor Onion Browser is, is it's a completely untraceable browser. And then along comes Bitcoin. And he has this realization like, oh, my God, I can pair the Tor Onion browser with Bitcoin and I can create the website that is the Amazon of drugs, which becomes the Silk Road. What is Silk Road beyond the Amazon of drugs? Or is it just that simple? Is it just the Amazon of drugs?
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--:-- Mick Bilton: Well, and there's the original Silk Road, which went through China. Right. That's not the one that this kid from Austin invented. Yeah, that's the Marco Polo version of it. So the way the Silk Road, it starts off, right, with that you are able to buy just drugs that are for sale. So to do this, to prove his thesis, Ross Ulbricht, he rents a cottage, like a secret place in Bastrop Park in Austin, and he secretly starts to grow magic mushrooms. And he does it, ironically, while he is watching the show Breaking Bad. Seriously, when the going gets tough, you don't want a criminal lawyer. You want a criminal lawyer. Know what I'm saying?
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--:-- Mick Bilton: Eventually, he gets enough mushrooms that he fills a big trash bag with them, and he goes to his website, and he posts the mushrooms on the website and waits for a buyer. And then what he does is he starts to go to these forums online anonymously and he says, hey, has anyone seen this website, The Silk Road, where you can buy and sell drugs? And then one day someone orders some and emails them and he like holy shit I sold some drugs This is amazing On my website it worked And then what happened is it started to spread And soon people started listing other drugs like marijuana and acid and things like that.
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--:-- Mick Bilton: A few months go by. And then Gawker, the website, writes about it. R.I.P. And in that moment, it explodes. It becomes national. It's covered in the news. Chuck Schumer finds out about it. You want heroin? Opium, cannabis, ecstasy, psychedelics, stimulants, opioids. And here they are. And so the website gets this national, which then turns into international attention. And before you know it, he's selling hundreds of millions of dollars of drugs. And then it starts to move to much more nefarious things than just basic weed and magic mushrooms.
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--:-- Mick Bilton: There's a debate about whether they should sell body parts on there. They start selling – they create another version of the site where they start selling guns. Proves to be a little bit more difficult because it's harder to mail those to people. But it was a free-for-all. Anything you wanted to buy and sell was available on this marketplace. And all you needed was a few Bitcoin and the Tor Onion browser. And that was it.
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--:-- Mick Bilton: But what happens with Ross and the website is it gets to a point where he's making so much money and so many drugs and things are being sold through there that it captures the attention of people in China. And in China at the time, this is where they started to make this thing called fentanyl. But what the Silk Road enabled was people in China who were making these very, very, very dangerous drugs to mail them over here. And what you start to see happen is essentially the beginning of the fentanyl epidemic. And the first people that are affected by it are kids who are buying much less expensive versions of heroin without worrying.
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--:-- Mick Bilton: You know, the thesis proves true. I don't have to worry about being mugged by a drug dealer in the middle of the park at night. I can just buy it on this website. But the part that Ross didn't think about was that kids were getting these drugs, had no idea how to use them, and started overdosing and dying. And of course, the government was desperately trying to figure out how to stop it while all this was going on.
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--:-- Mick Bilton: How do they catch the pirate? What ends up happening is Carl Forrest, this guy from the DEA, he goes undercover on the Silk Road working for Ross Ulbricht. And this guy, Sean Bridges, Sean is a Secret Service agent. They get together and they find out one of the employees who works for the Dread Pirate Roberts and they do a raid on his house and they arrest him. And the Dread Pirate Roberts, Ross Ulbricht, thinks this employee has run off with his money. But really what's happened is he's been arrested.
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--:-- Mick Bilton: So the Dread Pirate Roberts starts talking to this person who tells him that he kills people. You ever need someone killed? And so the Dread Pirate Roberts reaches out to him and says, I have this employee. He stole my money. I want him dead. What Ross doesn't realize is that he's talking to the DEA agent who has arrested the employee who has supposedly stolen the money. So they fake the murder of this employee by fake drowning him and filming it and then pouring a can of like Campbell's soup SpaghettiOs in his mouth and taking a picture to make it look like he's dead. Wow.
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--:-- Mick Bilton: And the Dreadpite Roberts pays them. But rather than take the money and give it to the feds as they should have, they keep the money. That's going on concurrently as the FBI and the Department of Homeland Security and the IRS are actually trying to solve the case. There's a big meeting with all of the agencies, IRS, FBI, everything. This thing is getting so big. There's literally hundreds of millions of dollars in sales that have happened. And the pressure really gets turned up for this thing to get taken down.
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--:-- Mick Bilton: Also because we're starting to see these synthetic drugs starting to come into the country. and they decide they're going to do this big sting operation in San Francisco. And there was a little library there. It was a tiny library, two stories tall, the Dread Pirate Roberts. He doesn't like going on the Internet to do his Silk Road work from his apartment in case it's ever traced back. And one day he goes to the local library in Bernal Heights, and the federal agents are following him, and he goes and he logs on, And two agents are sitting in the library across from him and they get into a fake screaming match. And when he looks up to see what's going on, another agent swoops in, grabs the laptop and all of the other agents grab him and arrest him.
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--:-- Mick Bilton: The secretive dread pirate Roberts was arrested in the most unlikely of places, this local public library in this San Francisco neighborhood. The FBI claim Ulbricht sent a hitman he found on his own site, 150,000 in bitcoins. The biggest criminal trial in the history of the Internet is over this morning. And so apparently is Ross Ulbricht's freedom. The mastermind of the Silk Road website was sentenced to life in prison without parole. And he's sentenced for distributing narcotics, using the Internet to distribute narcotics, all of these different things. And the judge said, I believe that there are good in people and there are bad in people. And she says, I believe that there is good in you and bad in you. But what you did was it started an entire new paradigm of crime in this country and people died as a result of it.
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--:-- Sean Rameswaram: How quickly does a movement to free him spring up? There is immediately a movement that starts and it actually starts during the trial. And it grows and it grows and it grows as crypto grows and Bitcoin and all these other things become these mainstream topics.
--:-- Eric Finman: I'm Eric Finman. I'm known for being the youngest Bitcoin millionaire in the world. I really support the free Ross petition because he has been very unfairly treated by the justice system and the world around him. This is the greatest violation of the Eighth Amendment that I'm aware of in the United States today. If they start arresting people for what other folks do on a message board, whether it's file sharing or talking about drugs or whatever, or talking about violence, I mean that sets a precedent like the old Soviet Union or Nazi Germany.
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--:-- Eric Finman: Look, there's an argument to be made that pre the Silk Road and the Dread Pirate Roberts, there was nothing that you could do with Bitcoin that made any sense. So a lot of people got incredibly rich as a result of the things that Ross Ulbricht did And so they probably see him as some sort of like you know Bitcoin deity that they have to praise Nick, we know how this story ends. We know that Ross, the dread pirate Roberts, gets a presidential pardon. When does Donald Trump enter the chat?
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--:-- Sean Rameswaram: When he was president as number 45, there were discussions, funnily enough, about freeing Ross, about pardoning him on his way out. And from what I have heard, there was a lot of people that didn't want that to happen in the White House because that wasn't law and order. Trump 45 was very anti-drugs, and I think Trump 47 is so enmeshed with the tech community, and the tech community sees anything anyone does with technology as a good thing, and they lock arms and sail off into the sunset together.
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--:-- Sean Rameswaram: Nick Bilton, he's the author of American Kingpin The Epic Hunt for the Criminal Mastermind Behind the Silk Road Which, somehow no one has made into a movie yet We got Robbie Williams as a monkey, but no Silk Road movie Curious
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--:-- Sean Rameswaram: I'm Sean Ramos from Promises Made, Promises Crypt When we're back on Today Explained
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--:-- Sean Rameswaram: Support for Today Explained comes from Built Rewards. These days, it seems like everybody has a rewards program. You swipe your card and you get one cent on the hundred dollars. But with your rent, frequently, you just pay month after month. You never get anything from it other than that roof over your head. Not anymore, says Built Rewards. Built Rewards says it lets you earn points on your rent. By paying rent through Built, they say you can earn flexible points that can be redeemed toward hundreds of hotels and airlines, perhaps a future rent payment, your next Lyft ride, and so much more.
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--:-- Sean Rameswaram: Support for the show today comes from Life Kit, the podcast from NPR. What's in your life kit? I'm asking. They didn't ask that. Every day you have to make choices that might shape the direction of your life, but you can't flip to the back of the book to find an answer key. Instead, you can listen to the Life Kit podcast from NPR. Life Kit offers real stories about common issues like relationships, finances, parenting, and your career. If you're looking to move with more intention or just need thoughtful guidance on living better, Life Kit delivers strategies to help you make meaningful, sustainable change from fitness routines to mental resilience, navigating personal goals to tackling burnout.
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--:-- Sean Rameswaram: The golden age of America begins right now. Today Explained is back and we're with Tony Rahm from the Washington Post where he covers economic policy and accountability. Tony, the president of the United States just scored a bunch of political points with the crypto community by pardoning this guy, Ross Ulbricht from Silk Road. At the moment, it looks like Trump's a big crypto guy, but it hasn't always been that way, right? It certainly hasn't always been that way.
--:-- Tony Rahm: You know, he pretty infamously described crypto as a, quote, scam. Bitcoin just seems like a scam. But yet here we are now, years later, and President Trump is out there trying to fulfill the policy and political wish list of this industry that he didn't like when he last served. And I think that that just underscores the political transformation of Donald Trump into somebody who has openly embraced cryptocurrency, not just from the political standpoint and through the policies that he's beginning to articulate, but from a business standpoint as well.
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--:-- Tony Rahm: As somebody who's introducing his own cryptocurrency and lending his support to a crypto lending platform, this is somebody who has looked to try to mobilize this industry for personal and political gain. So help us understand the 180. How did he go from no to very much yes? What changed?
--:-- Tony Rahm: I don't know if there was any one singular defining moment where the light bulb went off, so to speak. But I think over the course of the 2024 campaign, what you saw was this continued aggressive outreach on the part of the crypto industry to win Donald Trump support through donations and through other sorts of things that helped his campaign.
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--:-- Tony Rahm: You had individuals like David Bailey, for instance, who's a big crypto investor. He's big in the Bitcoin community. And David was actively engaging in outreach with President Trump to try to show him the virtues of Bitcoin. And I think also what was really impactful on the president, he has family, children that have gotten very involved in Bitcoin. And I think that that kind of mirrors the experience that a lot of people have had.
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--:-- Tony Rahm: You had Bitcoin miners going down to Mar-a-Lago at one point in the summer to pitch Trump on this idea that if the U.S. wasn't dominating in cryptocurrency, that other countries like China ultimately could. The president put out that tweet that was like, we want all the Bitcoin made in America, which was a brilliant tweet. that we helped him with.
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--:-- Tony Rahm: And then you had money starting to roll in, not just to Trump, but to many congressional candidates as crypto investors and crypto executives looked to win over some of these key policymakers in pursuit of a more lenient regulatory environment here in Washington. And I think when you add all of those things up, it lends itself to the sea change that we saw, where President Trump ultimately was standing in front of a crowd of Bitcoin supporters in Nashville at one point this past summer talking about how he was going to turn the U into the quote crypto capital of the planet The planet and the Bitcoin superpower of the world and we get it done
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--:-- Tony Rahm: It's that continued political support and that outreach on the part of the crypto industry that helps bring about Trump's change. We heard earlier in the show about how Trump won over libertarians by promising them their king would be freed, Ross Ulbricht. How did he win over the crypto community? Did he make any promises there?
--:-- Tony Rahm: Yeah, and you know, when he was in Nashville, he talked a lot about Ross. There were lots of free Ross hats there as he was trying to win over that crowd as well. Today, I repeat my pledge to commute the sentence of Ross Ulbricht to a sentence of time served. It's enough. It's enough. With the crypto industry, it's all been about getting Washington off of their back. So under President Joe Biden, you had a very active and aggressive Securities and Exchange Commission. The SEC went after a number of companies that it felt were not doing right by the public and weren't following federal laws regarding investor disclosure and investor protection.
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--:-- Tony Rahm: And you saw many cases, some of which haven't yet been finalized, between the SEC and major crypto companies like Coinbase and Ripple. On day one, I will fire Gary Gensler and appoint a new SEC chairman. Now, with Trump, you know, President Trump has promised to appoint somebody, and he has, in Paul Atkins, to the SEC, who would be much more lenient on crypto, who has ties to the crypto industry. In fact, in Trump's own words, he said he was going to have policy written by people who love your industry. We will have regulations, but from now on, the rules will be written by people who love your industry, not hate your industry.
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--:-- Tony Rahm: And Trump has been pretty public in saying that his goal is to boost the value of these cryptocurrencies. People that want to see your industry thrive, not dive. And so that marks a pretty significant shift from what we saw under Biden. That's not to say that President Biden hated crypto or something, though he's often presented as having hated crypto. It's just that Trump does not believe that the SEC and other key federal agencies should be aggressively going after this kind of technology in the way that it has in the past.
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--:-- Tony Rahm: So I know it's only been a week, but how has our first crypto president delivered so far, if at all, for his community other than pardoning Russ?
--:-- Tony Rahm: Yeah, Trump has done what he has said he was going to do. You know, you just sort of think back to his list of promises, and they've made progress on all of them at this point. He said he was going to fire Gary Gensler, who was the head of the SEC. And while Gary ultimately did not need to be fired because he stepped down, Trump instead appointed Paul Atkins and nominated him to run the agency. And Atkins is a former advisor to crypto companies.
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--:-- Tony Rahm: Trump said he was going to set up this council to help draft and advance crypto policy in the White House. He signed an executive order last week that does precisely that. Trump even said he was going to create this national stockpile of Bitcoin. We would have the US government essentially warehousing the assets that it seizes from past criminal investigations. And the executive order that Trump signed last week takes steps towards that.
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--:-- Tony Rahm: So on each of these fronts, Trump has taken those early steps to turn his policy into practice. And now it'll be up to the administration, to the new Congress to continue to see that through.
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--:-- Tony Rahm: OK, and beyond all the executive action, he also launched his own meme coin last week, right? Yeah, we have a meme coin from Trump. That's probably one of the more controversial things here because that meme coin got launched just days before he took the oath of office. I don't know much about it other than I launched it. I heard it was very successful. I haven't checked it. Where is it today? You made a lot of money, sir. How much? Several billion dollars, it seems like, in the last several days. Several billion? That's peanuts for these guys.
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--:-- Tony Rahm: You know, in talking to folks like Norm Eisen, who's a former government official and ethics expert, what he told us is that this was a pretty significant conflict of interest. Because at one hand, you have Trump, days before he entered office, creating this meme coin that could potentially be worth billions of dollars, while at the same time pursuing policies that lessen regulation on the industry and perhaps drive up the value of things like the meme coin that Trump introduced.
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--:-- Tony Rahm: So there's a huge conflict of interest there in the eyes of folks like Norm Eisen that just speaks to the broader concern here, which is this commingling of Trump's political and policy interests and his personal business. Okay, so with regard to political ethics here, we have in some sense more of the same from the president. But this time, there might be implications for the broader financial system, which is to say all of us personally could get affected by a cozier relationship between the president and the crypto community.
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--:-- Tony Rahm: You know, we are at a very pivotal moment. We're a few years removed from the collapse of FTX, after which we saw very little activity from Congress writing the rules of the road for these major important multibillion-dollar businesses that hold the future of the financial system in their hands. And these questions about the role of crypto, its inclusion in payment systems, the assets that have to back it up, the protections for consumers, all of these things fall to Trump and to a Republican Congress that largely got there with the help of crypto donations. They have to confront these questions as these companies and these technologies become bigger.
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--:-- Tony Rahm: And so you're right. The big question here is how much does money talk at the end of the day? Do we end up in a world where we have a pro-crypto Congress and White House pursuing pro-crypto regulation because they've been backed by these pro-crypto political forces? And at the end of the day, we create a system that's riddled with inequities and is at risk for collapse. That's the big picture question and the big picture concern if you talk to lots of critics here who really worry about the political rise of the crypto industry.
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--:-- Sean Rameswaram: and Rob Byers Mixed and Mastered. This is Today Explained.
