There is something in the code of Bitcoin.

No, I don't mean the blockchain, but rather a mental virus: it seems to corrupt almost everyone who touches it. It appears that a couple of federal investigators, in the process of attempting to take down the Silk Road, succumbed to this virus, allegedly stealing millions through various schemes.

But in the criminal complaint against Carl Mark Force IV (no, this is not a character in Archer, but the actual Drug Enforcement Administration agent accused of corruption) and Shaun Bridges is not the Get Out of Jail Free card the defense of Ross Ulbricht, the convicted Silk Road operator, desires. Although the accusations are voluminous and disturbing, and effectively torpedo the Maryland murder-for-hire case, the rest is far more complicated.

It’s also a good news/bad news situation for a host of unknown drug dealers on Silk Road. These unknown drug dealers should sleep uneasy, as the fed’s Bitcoin tracking is liable to get much better as a consequence of this case.

Follow the Bitcoins to the Pit of Gox

Before the Silk Road trial, the feds apparently had no clue about how to trace Bitcoin. They learned, quickly, and this complaint showed clear causal links between Ulbricht and Carl Mark Force IV. But at the same time, the feds aren't perfect (yet).

When Curtis Green (aka "Flush" aka "ChronicPain"), the freshly busted Silk Road administrator, demonstrated the administration interface and the ability to change passwords to the investigators, Bridges supposedly skipped the next day's session and instead used Flush's credentials to steal some 20,000 bitcoins, transferring them to this address, moving the bitcoins onward to Mt. Gox, and then transferring the profits some $90,000 at a time to his Fidelity account in the name of "Quantum International Investments LLC". And in a final knife twist, Bridges was the agent who signed the forfeiture order seizing Mt. Gox’s money for money laundering!

The rest of Silk Road's contingent of currently freed drug dealers can breathe free, but only for now: the feds don't currently have a copy of the Mt. Gox internal database. The connection presented in the complaint is slightly tenuous, with "someone familiar" asserting that one of the addresses which received some 2,000 bitcoins belonged to Mt. Gox, creating a tenuous, "trust us" link between the stolen coins and Mt. Gox.

Should the feds obtain the full Mt. Gox data, they can turn the tenuous link into a concrete connection. Using the Gox hacked data, I've identified the internal Mt. Gox user wallet as "cf0ffc2d-6113-4c44-984b-654079b3d527", which not only received a net 20,800.11 bitcoins, but has multiple transactions directly from the theft wallet to this Mt. Gox account, more than just the ones reported in the criminal complaint.

So the thief did indeed transfer his loot to Mt. Gox, and not only will the internal data show this account received the stolen bitcoins, but also where the money flowed into, completing the chain for the prosecution.

There are dozens of drug dealers who did the same thing. They commonly took their profits directly from Silk Road and transferred them into Mt. Gox before converting them into dollars. For now, they still breathe free air: the feds don't know who they are. But the day the feds obtain the Mt. Gox database, this changes. The feds can track the payments from Silk Road to Mt. Gox, and then track the payments from Mt. Gox to the dealers, and then start breaking doors.

Don't Get Out of Jail Free

Unfortunately for Ross Ulbricht, however, this is not a get out of jail free card in New York, and probably not even grounds for a new trial. These arrests were not some sudden shock to the defense, but an investigation which the defense was well aware of. The trial court just unsealed all the documents concerning these issues.

The results for Ulbricht weren't pretty. The prosecution convinced the judge that Carl Mark Force IV's behavior was not exculpatory to the defense, and absent any evidence that Force attempted to frame Ulbricht, irrelevant. For example, unless Ulbricht knew that Force or his colleagues, and not Flush, stole the treasure, it wouldn't affect the murder-for-hire charge if the feds brought it up.

Even more critical is that Force wasn't involved with the New York investigation. There are few things many feds like less than drug dealers, and one of those is other teams getting the credit. The New York investigation focused on technical analyses, identifying the server and proceeding from there, while the Maryland case focused on infiltrating Silk Road and taking it down from within.

It's quite clear that these two investigations were not really on speaking terms: the Maryland prosecutors didn't even know the name "Ross Ulbricht" until the FBI tackled him in the San Francisco library. A good thing too, since Force previously threatened Ulbricht as "Anand Athavale", a name obtained earlier in the investigation.

And the New York prosecution went one step further. Although they obtained permission to include references to the Maryland murder-for-hire case as part of showing criminal intent for the kingpin charge, they scrupulously avoided bringing it up. I thought it was simply for double jeopardy concerns. Nope, they did not want to touch any evidence possibly contaminated by Force.

These filings also shows just the amazing lows defense attorney Joshua Dratel would sink to in defending his client: he really does deserve the Saul Goodman award for lawyering above and beyond the call of duty.

Dratel proposed an Exhibit E consisting of "DeathFromAbove" (aka Carl Mark Force IV) providing DPR with the name "Anand Athvale", while eliminating all context from the conversation. Not only hearsay, but irrelevant. To put it simply: "Evidence that tends to prove a person other than the defendant committed a crime is relevant, but there must be evidence that there is a connection between the other perpetrators and the crime, not mere speculation on the part of the defendant."

And the context matters. With context, it's not only clear that Ulbricht viewed the threat as bogus, but the full reply also countered the defense's own assertion of "Ulbricht started the site and handed it off", conveniently excluded from the chat. A nice try on Dratel's part, but the judge wasn't having it.

So what now?

The Maryland case is dead. Thanks to double jeopardy, the only remaining offense was the murder-for-hire case hopelessly tainted by a corrupt agent. Even though the prosecution could still gain a conviction, the result would be deeply unpleasant for the feds. Unlike the New York case, the Maryland prosecution can’t hide Force’s activities under a rug someplace. Dratel should arrange a plea in Maryland of "No Contest" to a reduced charge of aggravated jaywalking. The Maryland prosecutors will accept in a hot second.

But as for a new trial in New York? Forget about it. The Force arrest was not some bolt from the blue, but a development already considered, and rejected by the judge. Dratel can pontificate about how his client was denied due process (while not having a scintilla of actual evidence about another "Dread Pirate"), but such posturing does no good except for perhaps gaining donations.

Nicholas Weaver is a researcher focusing on computer security at the International Computer Science Institute in Berkeley, California.