Last week produced a stunner in the Silk Road trial: the revelation that the Department of Homeland Security suspected Mt. Gox CEO Mark Karpeles of running the massive, anonymous narcotics market just months before settling instead on defendant Ross Ulbricht. But just as quickly as Ulbricht's defense revealed that alternate theory of the Silk Road's ownership, the prosecution and judge have shoved key elements of the story back into the closet.

Responding to a motion from prosecutors Monday afternoon, judge Katherine Forrest ruled Tuesday that key portions of last week's defense cross-examination of DHS special agent Jared Der-Yeghiayan would be retroactively declared inadmissible. Der-Yeghiayan had testified that he strongly believed starting in 2012 that the mysterious administrator of the Silk Road known as Dread Pirate Roberts was Karpeles, the CEO what was at the time the world's largest bitcoin exchange. But the judge declared that testimony had been based on Der-Yeghiayan's "beliefs" rather than "competent evidence," and thus should struck from the record as "hearsay," or unsubstantiated rumor.

Forrest said that after the prosecution and defense hashed out exactly which parts of that testimony were based on Der-Yeghiayan beliefs, she would have them removed from the court's transcript and would instruct the jury to disregard those elements of Thursday's questioning. "My intent is to give the jury general instructions that [Der-Yeghiayan's] suspicions and conclusions are to be struck from the record," Forrest said.

Ulbricht's defense strongly protested that decision. "To completely eviscerate the defense after the fact is unfair," said lead defense attorney Joshua Dratel, pronouncing the last word with two syllables. He continued to debate the point for much of the morning in open court and private discussions with the judge and prosecution.

"I'm done with this issue," Forrest eventually told Dratel. "I'm not suggesting you should like it or agree with it, but that's the way we're going to proceed."

Just five days earlier, Dratel's dramatic cross examination of Der-Yeghiayan elicited a long list of evidence that the Homeland Security investigator once suspected Karpeles had been the Silk Road's shadowy administrator. The evidence included an affidavit he had written to a judge seeking a warrant to search Karpeles' email accounts, a private email in which he asked fellow DHS colleagues not to tip Karpeles to his investigation, and another internal email in 2013 citing an interview I conducted with the Dread Pirate Roberts; Der-Yeghiayan wrote that the writing of Silk Road's administrator in that interview "sounds quite a lot like" Karpeles.

But all of those points, the prosecution argued in its followup letter to the judge, violated the court’s rules of evidence. “The line of questioning is improper insofar as it is focused on [special agent] Der-Yeghiayan’s state of mind during his investigation,” wrote the prosecutors. “Indeed, an agent’s beliefs often rest on hearsay, hunches, or other information that is not in itself admissible. The defense cannot circumvent the evidentiary rules prohibiting the admission of such information by having the agent testify about what he believed at various points during the investigation or why he believed it.”

Judge Forrest ultimately agreed. She told the defense it could bring up any of the evidence that might have raised Der-Yeghiayan's suspicion of Karpeles, such as his ties to the website Silkroadmarket.org, a page that provided instructions on accessing the Silk Road's drug market. But she ruled out any statements about the suspicions or conclusions Der-Yeghiayan had reached based on that evidence.

In its filing Monday, the prosecution attacked that Silkroadmarket.org connection as well. Prosecutors wrote that the DHS's investigation had subsequently revealed that Karpeles hadn't registered Silkroadmarket.org, but it had instead been registered by Ulbricht using Karpeles' web hosting company Kalyhost. "The fact that the defendant used Mr. Karpeles’ webhosting service to host the 'silkroadmarket.org' website turned out to be the only connection [special agent] Der-Yeghiayan ever found between the website and Mr. Karpeles," the prosecution's letter reads.

Karpeles, whose half-billion-dollar bitcoin exchange collapsed and filed for bankruptcy early last year, has denied any connection to the Silk Road. When his name was first publicly mentioned as an earlier suspect in the Silk Road case last week, he tweeted: "This is probably going to be disappointing for you, but I am not and have never been Dread Pirate Roberts."

With the courtroom evidence that Karpeles might have been that drug kingpin significantly weakened, it's no doubt a disappointing outcome for Ulbrict's defense team, too.