The founder of Silk Road, Ross William Ulbricht, has been arrested. He is accused of money laundering, hacking, narcotics trafficking conspiracy and of (unsuccessfully) hiring a hitman for over $100,000. Millions of dollars in Bitcoins have been seized, and Silk Road has been shut down.

The criminal complaint reveals that over 100 undercover purchases were made by law enforcement agents, giving Silk Road dealers plenty to worry about. But the most intense panic is coming from a specific kind of Silk Road user: the offline drug dealer.

In order to buy something on Silk Road, you first have to transfer funds to your account. Since these funds are Bitcoins, and since Bitcoin transfers are final and permanent, any money held in a Silk Road account is no longer available to the users who deposited it. For most users, this is an annoyance: