Ross Ulbricht Silk Road trial, Day 5 Wednesday (journal and

https://www.scribd.com/doc/253356971/Ubricht-Trial-Day-5 / https://www.dropbox.com/s/fwkbulvn3nx73vk/253356971-Ubricht-Trial-Day-5.pdf / https://pdf.yt/d/RDTtc0lRBT7oTkn- & https://pdf.yt/d/hlqBE2T7CluvDl63 / http://antilop.cc/sr/files/2015_01_21_Ulbricht_trial_transcript_W2_D2.pdf

MR. DRATEL: Your Honor, while we are waiting, could we just do a quick sidebar?
THE COURT: They will be horrified if the jury walks out and see us at the sidebar. It will be like, you know, Groundhog Day.

[No-one's forgotten how Tuesday went!]

MR. DRATEL: Can I say, "Did you send all of this material to a college professor for analysis?"
Just that question.
MR. TURNER: We argue that it is irrelevant to anything.
THE COURT: Well, it is not irrelevant.

Q. Did you take this photograph?
A. I did not take this.
THE COURT: May I pause for one second? I think that
my binders have taken a walk, and they will walk back.
(Pause)

A. I only actively chatted, though, with -- primarily with the
cirrus account, though, but the rest of the ones were primarily
used for either buys or for screen shots.

Q. Right. Now, you talked about the emails you got from Mark
Karpeles' companies, right?
A. Correct.
Q. Those are the only accounts at Google, right?
A. There was -- for him, I believe there was a few. He had a
personal one and then he had one that was to Evoni (ph) which
is a company.
Q. But from Google?
A. It all is through Google, yes.
Q. You don't know about email accounts that he may have had on
proprietary servers of his own, right?
A. I do not know of any.
Q. So you didn't get to look at those if they exist, right?
A. I didn't.
Q. Did you ever get to look at any of his Tor chats?
A. I did not find any Tor chats from him.
Q. Any Java or Off The Record or Pidgin chats of his?
A. I did not.
Q. Did you get anything from any other servers with respect to
Mark Karpeles other than Google?
A. Nothing about -- I mean, we did a broader search on another
individual from his company, but no.

[How casually they loot people's email accounts. ~0 evidence Barr was DPR,
yet even after *failing* to find anything in Karpeles account, they go through Barr's
emails anyway!]


Q. But you're aware that in July of 2013, just a couple of
months before Mr. Ulbricht's arrest, that he was interviewed by
Homeland Security, right?
MR. TURNER: Objection; foundation.
Q. You're aware that he was interviewed, aren't you?
A. Yes, I was.
Q. And you're aware that it had to do with a shipment from
Silk Road, right?
MR. TURNER: Objection; foundation, hearsay.
THE COURT: You need to go back over that and lay a
foundation for it.
Q. During your investigation, you became aware, right, that
Mr. Ulbricht -- withdrawn.
That Homeland Security interviewed Mr. Ulbricht
about -- and you've read -- withdrawn.
During the course of your investigation, you were kept
apprised of what was going on, correct?
MR. TURNER: Objection; hearsay, vagueness.
Q. For purposes -- you read reports --
THE COURT: Hold on. Ask the question.
Q. You read reports about an interview of Mr. Ulbricht by
Homeland Security, correct?
THE COURT: You can answer that yes or no.
A. Yes, I did.
Q. And the subject matter was about a package shipped by Silk
Road, a Silk Road vendor, correct?
MR. TURNER: Objection to the hearsay.
THE COURT: Right. That's sustained.
Q. Now, you were asked also on redirect about travel records,
right?
A. That's correct.
Q. And you said there were some aliases. You ran those
aliases for travel records, too, didn't you?
A. The aliases for travel records?
Q. In other words, any aliases for Mr. Ulbricht that you might
have found, you ran them for travel records, too, didn't you?
A. I can't recall if I did.
Q. Now, we talked about that he takes about a trip a year out
of the country. And you were asked about international travel,
whether you could determine whether he went from one country to
another country, right; you couldn't tell that from the travel
records that you looked at in terms of a sheet that you got
from border authorities, right --in other words, either leaving
the country or coming into the country is what you said, right?
A. The records that were reflected in the database that we
have access to just shows where they're coming from and where
they travel to.
Q. But you also had the passport, right?
A. I didn't have that until after the arrest.
Q. Right, but you had it now and you've had it for quite some
time, right?
A. Yes.
Q. So the case passport is in evidence, right?
A. Yes.
Q. It's Exhibit 134, right?
A. I believe so, yes.
Q. If we can go to the next page, please. Those are the only
stamps in there, right, there's one for Australia, one for the
Island of Dominica and one for Costa Rica, right?
A. Correct.
Q. So if he went from Costa Rica to Brazil, there would be a
stamp, wouldn't there, on his passport?
A. Not necessarily. There's -- I've worked as border
inspector for a lot of years, so I do know that sometimes there
aren't always the stamps for the countries they enter into. It
just depends.
Q. So you know whether he would have been stamped or not?
A. I couldn't tell you if another country would for sure stamp
it or not. Sometimes they do, sometimes they don't.
Q. Those three stamped it, right?
A. They did stamp it.
Q. And it matched exactly what you had on the travel records,
right?
A. I'd have to go back and review it, but --


Q. Did you get anything from any other servers with respect to
Mark Karpeles other than Google?
A. Nothing about -- I mean, we did a broader search on another
individual from his company, but no.

MR. DRATEL: A couple, your Honor just based on that,
based on that.
THE COURT: My goodness. Okay. Just two or three.
MR. DRATEL: Yes.
... A. The travel history is not based on the passport.
Q. And with respect to --
THE COURT: That was two.
MR. DRATEL: I'm sorry?
THE COURT: I was counting. That was two. You get two more.


Q. What is the title of this file, Mr. Kiernan?
A. 2010.docx.
Q. And what is the date that this file was last changed as
reflected in the meta data?
A. 2/27/2011.
MR. HOWARD: Ms. Rosen, can you please add the
highlights to this document just for the ease of reading them
in. I'm going to read the highlighted portions now. If we can
zoom in at the top.
"2010. I started the year in the middle of my stint
with Good Wagon Books. Donny and I had worked on it the last
quarter of 2009 and we were trying to ramp up by hiring people
to go door-to-door. It was a real struggle and by the end of
our trial partnership, it was clear that we hadn't grown the
business to the point that it made sense for me to stay on.
"I had to find a job quickly, so I turned to Craig's
List and found American Journal Experts. For the next six
months, I edited scientific papers written by foreigners. It
sucked. The hours were flexible, but it drained me. I hated
working for someone else and trading my time for money with no
investment in myself."
Can we go to the next page, please.
"While all of this was happening, I began working on a
project that had been in my mind for over a year. I was
calling it Underground Brokers, but eventually settled on Silk
Road. The idea was to create a website where people could buy
anything anonymously, with no trail whatsoever that could that
could lead back to them. I had been studying the technology
for a while, but needed a business model and strategy. I
finally decided that I would produce mushrooms so that I could
list them on the site for cheap to get people interested. I
worked my ass off setting up a lab in a cabin near Bastrop off
the grid. In hindsight, this was a terrible idea and I would
never repeat it, but I did it and produced several kilos of
high quality shrooms. On the website side, I was struggling to
figure out on my own how to set it up. Driving out to Bastrop,
working on Good Wagon, and trying to keep up my relationship
with Julia was taking all of my time. By the end of the year,
I still didn't have a site up, let alone a server."
Ms. Rosen, can you zoom out to the next page, please.
"In 2011, I am creating a year of prosperity and power
beyond what I have ever experienced before. Silk Road is going
to become a phenomenon and at least one person will tell me
about it, unknowing that I was its creator. Good Wagon Books
will find its place and get to the point that it basically runs
itself. Julia and I will be happy and living together. I have
many friends I can count on who are powerful and connected."


Q. And where in the defendant's computer was it located?
A. This was in his home/frosty/Documents/journal/2011
directory.
Q. And what was the date when this file was last changed?
A. 2/5/2012.
MR. HOWARD: Ms. Rosen, can you please add the
highlights to this document as I'll read them, if you can just
zoom in the top.
"2011. Still working on Good Wagon Books and Silk
Road at the same time. Programming now. Patchwork php mysql.
Don't know how to host my own site. Didn't know how to run
bitcoind. Got the basics of my site written. Launched it on
freedomhosting. Announced it on the bitcointalk forums. Only
a few days after launch, I got my first sign-ups and then my
first message. I was so excited I didn't know what to do with
myself. Little by little, people signed up, and vendors signed
up, and then it happened. My first order. I'll never forget
it. The next couple of months, I sold about ten pounds of
shrooms through my site. Some orders were as small as a gram
and others were in the qp range. Before long, I completely
sold out. Looking back on it, I maybe should have raised my
prices more and stretched it out, but at least now I was all
digital, no physical risk anymore. Before long, traffic
started to build. People were taking notice, smart, interested
people. Hackers. For the first several months, I handled all
of the transactions by hand. When they came into my local
bitcoin client, I matched them up with the amount of time" --
I'm sorry -- "with the amount and time of the purchase and did
all of the necessary account adjustments. Between answering
messages, processing transactions, and updating the codebase to
fix the constant security holes, I had very little time left in
the day, and I had a girlfriend at this time!"
I'm skipping ahead.
"So, while still manually processing transactions and
responding to a bigger and bigger message load, I learned to
use codeigniter and began rewriting the site. At some point
around this time, I also learned how to host my own site and
was on my own servers."
"Rewriting the site was the most stressful couple of
months I've ever experienced. I worked all day everyday, still
processing transactions by hand, dealing with scammers,
answering messages, meeting new strange people through my site
and getting to know them. When I finally got the site ready,
there were several new features including a tumbler and
automatic mated payment processing."
"AND in addition to these stressors, Silk Road got its
first press, the infamous Gawker article. When you look at the
historic #s, you can see right when it happened. A huge spike
in signups, and the beginning of an upward trend in commerce
that would continue until the time of this writing, and
hopefully for much longer. There was really a smattering of
press at this time including the local news in FL! Most
interestingly, two U.S. senators came out against the site and
against bitcoin. They made a big deal out of it and called for
a shutdown of the site."
"Some major advances were price pegging, vendor
ranking, a more sophisticated feedback system, buyer stats,
transaction logging and building up the admin toolset. Most
importantly, the market began its path to maturity. Vendors
and buyers forged great relationships, more vendors came in to
fill holes in the market, other completed and variety, customer
service, and professionalism emerged. After making about $100k
an up to a good 20-$25k monthly, I decided it was time to bring
in some hired guns to help me take the site to the next level.
This would prove to be the biggest challenge I ever faced. I
actually got to see a fairly wide range of employee types.
SYG, the schmoozer who winds up being a waste, DA, the model
employee. Super enthusiastic, hard working and trainable.
Then there was Utah, professional who does it for the money.
Gets the job done, but his heart isn't always in it. First I
put up an ad for a system administrator. I needed someone to
help me take the back end to the next level in security. I had
many candidates duke it out in the forum on many topics from os
to isolation to software to security. In the end, I made what
I thought was a wise decision."
I was still working with SYG, so Utah was set to work
on rewriting the site. Around this time, Variety Jones showed
up. This was the biggest and strongest willed character I had
met through the site thus far. He quickly proved to me that he
had value by pointing out a major security hole in the site I
was unaware of."
"He convinced me of a server configuration paradigm
that gave me the confidence to be the sole server administrator
and not work with someone else at all. He has advised me on
many technical aspect of what we are doing, helped me speed up
the site and squeeze more out of my current servers. He also
has helped me better interact with the community around Silk
Road, delivering proclamations, handling troublesome
characters, running a sale, changing my name, devising rules,
and on and on. He also helped me get my head straight
regarding legal protection, cover stories, devising a will,
finding a successor and so on. He's been a real mentor.
Shortly after I met VJ, I started looking for a right hand man,
an administrative assistant of sorts. Someone to answer
messages, manage the forum and Wiki, and eventually even
dispute resolution. I found that man in Digital Alchemy, who
was one of the original members of the site and had been
modding the forums for pretty much the whole time. There were
lots of applicants, but for some reason DA stuck out as
promising, and he has turned out to be invaluable. He quickly
learned how to respond to messages and keep things running
smoothly. Before long he was managing the forums, the wiki,
the messages, the resolution center, scam prevention, and odd
jobs for me like mini-research projects and tedious tasks."

["changing my name" <-- did you hear that? That was the sound of a major plank of
the multiple-DPR theory going 'kaboom'.]

A. For the arrest, I was there two days prior to the arrest.
Q. And what were you involved in in the days leading up to the
And then there's an emoticon.
"myself: OK, click resolutions, form your support
panel.
Myself: This will pull up the most past-due
resolution.
Da: It's loaded.
Myself: Top line is how many past due resolutions
there are. It says "under review" to the users. The next six
lines are the transaction details. Kill resolution link
finalize the resolution without crediting buyer or seller. You
rarely need to use this, but sometimes both parties are
completely unresponsive and you need to clear it out of your
queue."
By the way, I note this is a conversation from
January 8, 2012. The conversation continues:
"myself: Left stats table is the buyer. Purchases
are the number of purchases that were eventually finalized and
not canceled and doesn't count open orders. Refund rate is the
total money returned to the buyer from the resolution center
divided by the total money spent. And the time-frames are the
stats from the past 30 days, 90 days, and the life of the
buyer's account. Keep notes of what these numbers mean so you
can review them if you forget."
Ms. Rosen, can you please publish Government
Exhibit 232A, which has already been admitted into evidence.
Q. Mr. Kiernan, at the top it says here pages "148-149 out of
257"?
A. Yes.
Q. Does 257 refer to the total number of pages in the full Tor
chat log?
A. Yes, it does.
Q. So now I'm going to read dated March 14, 2012.
"myself: Do you make purchases with a DigitalALCH
account.
Da: [...] No, not for a while. I had at one point
but only to way out there drop location. States away :)"
Emoticon.
Da: I use the KindestDaze generally.
Myself: That's good. Your name is getting higher
profile on the forums and we wouldn't want anyone with your
address from past orders to compromise you.
We might want to construct a new identity for you
though.
Da: Say that I'm quitting. Yea?
Myself: Maybe, or just disappear. Let's think on it
for a few days.
Da: IRL or online?
Myself: No, just online. My concern is that LE will
see that DA is a player at Silk Road by your forum presence and
then track down who you bought from and sold to under that name
and then find you irl.
Da: Damn. I really like the DigitalALCH moniker. It
really fit me. Oh, well freedom is better than prison."
Emoticon.
"myself: Yep. I got to protect my assets too.
Da: Do you mean me? Or outside assets.
Myself: You."

Q. "12/29/2011 chatted with VJ again today. Him coming onto
the scene has reinspired me and given me direction on the SR
project. He has helped me see a larger vision. A brand that
people can come to trust and rally behind. Silk Road chat,
Silk Road exchange, Silk Road credit union, Silk Road market,
Silk Road everything! And it's been amazing just talking to a
guy who is so intelligent and in the same boat as me, to a
certain degree at least. So, today we talked mostly about the
exchange, what to charge, boundary conditions, etc. Then I
went for a surf with Billy Becket. Caught a couple of good
waves, chatted with him took some wipe outs and went in. Soon
after, I ran around the city with Ashley and Kelly. We drank
some beer, walked around the city and botanical gardens. I
then went out with Jessica. Our conversation was somewhat
deep. I felt compelled to reveal myself to her. It was
terrible. I told her I have secrets. She already knows I work
with bitcoin which is also terrible. I'm so stupid. Everyone
knows I am working on a bitcoin exchange. I always thought
honesty was the best policy and now I didn't know what to do.
I should have just told everyone I am a freelance programmer or
something, but I had to tell half truths. It felt wrong to lie
completely so I tried to tell the truth without revealing the
bad part, but now I am in a jam. Everyone knows too much.
Dammit."



Q. And this takes place on January 15, 2012, correct?
A. Correct.
Q. "VJ." Emoticon or some sort of symbols. "Kicks self for
assuming. Should have asked for the code long ago. Just
didn't see the need. Mark it down as a learning experience for
me as well.
Myself: This whole thing has been on a wing and a
prayer. Besides basic php and html I've learned everything on
the fly.
Vj: Well, I'm glad I didn't go for that nap, this was
much more rewarding.
Vj: And you've done a damn fine job but you're
becoming more of a target for hackers and better ones as time
goes by.
Myself: I hadn't opened a Linux terminal until I left
freedom hosting a month after the site launched.
Vj: Just thank FSM that they didn't start on you
earlier.
Myself: FSM?
Vj: #Diety.
Myself: Ahh.
Vj: Flying Spag.
Myself: I've been incredibly blessed.
Vj: I have a lot of admiration for the big brain on
you.
I don't know two other people that could have done it.
Myself: I was a hairs breath from going to jail
before the site even launched for growing shrooms."

Q. This conversation took place on June 1, 2012.
A. Yes.
Q. "Vj: Also, Variety Jones is dead, poor fella. No more seed
biz for him.
"Myself: :(
"Myself: you goin by cimon now?
"Cimon: I was keeping that going as a way to get btc
legally in the UK, but I'm leaving the UK, and the legality
BY MR. HOWARD:
Q. The next part is October 3, 2011, is that correct?
A. Yes.
MR. HOWARD: "h7: Hi, i've written a new search
function. Im pretty happy about it, although it does contain
one "work around."
10
H7: the only changes are in controllers/silkroad.php
search_results function.
H7: what format do you want it in?
Myself: just send me your version of
controllers/silkroad.php
Myself: I'll let you know if I have any trouble with
it, or questions. Are you ready for your next challenge?
H7: yes, whats next?
Myself: We've been having issues with users getting
their accounts hacked. I think the main issue is from sites
pretending to be Silk Road and stealing the user's login info.
Myself: Can you look at the login functions and see if
you can come up with a way to mitigate this problem?"
Q. Mr. Kiernan, the next excerpt starts October 21, 2011, is
that correct?
A. That's correct.
MR. HOWARD: "H7: Silk Road, i would like to take next
week off. I have to take care of some other projects and i
figure you are busy with this outage anyways. The git repo
Kiernan - direct
Myself: ok, hopefully I won't be busy next week like
I've been busy this week. How much did you work this week?
H7: 35 hours
H7: Ive got the notes on cleaning the code for thrid
pary audit if you want it now.
Myself: sure, send it over. I'll see you on the 31st
then?"
Q. And the next excerpt starts from the same chat log,
correct?
A. The same log, yes.
Q. October 30, 2011, is that right?
A. That is correct.
MR. HOWARD: "H7: How was your week?
Myself: not bad. I will be travelling soon, so I have
much to do before I go and I didn't get as much as I wanted,
but this week I will focus on getting out of town.
H7: Ok."
THE COURT: I think you left out the word "done."
MR. HOWARD: Pardon me. "Myself: Not bad. I will be
traveling soon, so I have much to do before I go and I didn't
get as much done as I wanted, but this week I will focus on
getting out of town.
H7: Okay."

"H7: Is it just you over there?
Myself: I have people to take care of, but I'll be
travelling alone. is that what you mean?
H7: No, When you leave town will anyone be looking
after the servers?
Myself: oh, yes indeed
H7: Because i see "The Silk Road Staff" written in
messages, but i dont know if its just you or not.
Myself: it's basically just me, but more and more I am
trying to spread the responsibility around. You are a big part
of that.;)" Emoticon.

MR. HOWARD: "Myself: Okay, I want to give you a 50
percent raise to $1,500 per week. You're going to be managing
people and that always comes with extra headache so I want you
to be well compensated for it.
H7: Thank you.
Myself: Sure, thank you! So, we've received several
applicants already. They are sending their applications to the
username Silk Road HR on the main site. There is a link in the
footer now called "careers" that is directing them there.
Myself: I'll give you access to that account so you
can see who you want to bring in for a trial period.
H7: Okay.
Myself: We've talked about it before, but basically I
want you to create tasks that can be given a dollar value
corresponding to your estimate of the time they should take at
a rate of $25/hour. If a new person is giving you bad results,
or isn't communicating well, or for whatever reason they aren't
working out, gently let them go and block them out of the repo.
You'll probably want to figure out a good way of communicating
with your team, either through torchat, or the git site, or
whatever. You'll need to keep track of what your team members
have earned, and each week I'll send you the coins for you to
disburse. Try to keep it below $2,000 per week unless I let
you know that we can support more.
H7: Okay. Sounds good."

MR. HOWARD: "Myself: By the way, I'm going to be
unavailable from about 4:00 a.m. UTC Friday to about the same
time on Sunday, so I'll send you your pay tomorrow.
H7: K, you forgot me last week.
And can you send 100USD to Silk Road HR for this weeks
bounties.
Myself: You are right, so sorry about that. Sending
$3,000 now for last week and this week.
H7: Why $3,000 for two week?
Myself: Aren't I paying you $1,500/WK?
H7: It was 2,000 a week last time you paid me.
Myself: Our sales were up a bit that week so I
thought I'd give you a bonus. The last rate we had talked
about was $1,500 a week, though.
H7: I recall you asked me to work full time on the
group development and the new server/hosting. Since then you
have told me to focus on group development. Was I supposed to
revert to part-time.
Myself: No.
Yeah, I guess you are right, sorry my memory isn't
serving me right now."

Q. Mr. Kiernan, this chat is on January 26, 2013, correct?
A. Correct.
Q. "Myself: so, im down a set of hands as of 12 hours ago
"Myself: now would be a great time for you to come on
board if you are still interested
"Myself: or do you still have reservations?
"Scout: the only reservation i have is about the
safety of being part of the staff. safety from legal issues,
that is. having a hell of a time getting past that worry.
"Myself: the way i got over it is by looking at the
risk/reward
"Myself: if you look closely at the risk part of it
"Myself: you can break it down into 2 parts
"Myself: chances of getting caught, and what will
happen if you get caught
"Scout: right - and i have no idea what the answer is
to either of those hypotheticals
Myself: I'm not 100% about the what will happen part.
It's not like there have been cases in the past like ours. But
when you look at the chance of getting caught part, it's
incredibly small
"Myself: put yourself in the shoes of a prosecutor
trying to build a case against you
"Myself: what evidence could they pin on you?
"Myself: there is nothing on your laptop for them to
use, if you obscure your bitcoins propperly, there is no way
for them to trace them back to me. Realistically, the only way
for them to prove anything would be for them to watch you log
in and do your work.
"Scout: right. which, as i understand it, they could.
"Myself: this is just a realization I've come to after
doing this for almost 2 years
"Myself: sure, someone could stand behind you without
you realizing it
"Myself: we are definiely on the cutting edge, the
fringe. I'm not sure how else to put it, but the biggest con
about this work is not the risk of going to jail or having your
life disrupted
"Myself: it's getting used to and living with that
possibility no matter how remote
"Myself: and keeping your work a secret."

Q. The columns are alias, type, host, email/user, host pass,
username, pass, IP address, correct, Mr. Kiernan?
A. That's correct.
Q. And the IP address, as what you testified, is the unique
way that servers are identified on the Internet, correct?
A. That's correct, yes.
Q. And the other is the remaining columns are location,
expires, use, notes and there are some additional columns
further down the page, correct?
A. Correct.
Q. Now, to draw your attention to a couple that the government
has highlighted. There's one here that you can see, what is
the alias of this server I'm pointing to?
A. Bora.
Q. And what is the IP address that's listed for that server?
A. It's 193.107.86.49-53.
Q. And what -- does the chart describe the location of the
server?
A. Iceland.
Q. And what does it describe about the use of the server?
A. Market back end.
Q. I'd like to direct your attention to the other rows
highlighted here labeled "gala" under the alias.
A. Yes.
Q. What does it reflect about the IP address for this server?
A. 207.106.6.25.
Q. And what does it say about the host for the server?
A. Jtan.com.
Q. And what does it list as the email/user of this server?
A. Ggb.
Q. What does it list about the location of the server?
A. USA.
Q. And what does it describe about the use of the server?
A. Backup.
Q. I just want to draw your attention to one more row that's
not highlighted, this one right here, there's Bora and then
there's one that says BTC, correct?
A. Yes.
Q. And there's an IP address?
A. Sure.
Q. What is the IP address?
A. 193.107.86.34.
Q. Where is that located?
A. Iceland.
Q. What is the described use for that server?
A. Live wallets, and then in parenthesis, archive wallets.
Q. Now, Mr. Kiernan, what is listed on the very next line as
the use of the following server? We haven't talked about this
server, but what is listed in the "use" column?
A. I'm sorry. For which?
Q. It's this one -- you just said live wallets?
A. Yes.
Q. What is the use of the following server?
A. Oh, the one after it?
Q. Yes.
A. The 178 -- that's smed has.
Q. In your review of Tor chats recovered from the defendant's
computer, did you find any references to smed?
A. I did; yes.
MR. HOWARD: Ms. Rosen, can you please publish
Government Exhibit 231A, which has already been admitted into
evidence.
Q. And this chat is dated May 4, 2012, correct?
A. Yes.
MR. HOWARD: "Myself: can I get your thoughts on
something?
Smed: always
Smed: i am your slave :)
Myself: vm isolation vs. seperate physical machines
vs. jails, permissions, etc.
Smed: yeah
Smed: interesting stuff
Smed: the more moving parts you have, the more doors
you have to protect
Myself: "attack surface" yea?
Smed: yeah
Smed: i have been staring at the ceiling a lot over
this project and how to go about it
Myself: lots of ins and outs, lots of what have yous,
lots of strands in the 'ol duder
Myself: shead
Smed: i think a medium footprint is best.. it's
impossible to be small.. you just cant do it. all paths lead
down to the same road.. you will have 1 or 2 servers under
constant attack by people you dont want getting in
Smed: so my job, as I see it, is to make sure that
when they do get in that you can get back up and running with
minimal damage
Smed: for example.. moving btc to cold storage offline
as soon as daily funding estimates are reached
Myself: prevent, detect, redeploy
Smed: yes!
Myself: patch
Myself: and on and on
Smed: yeah, exactly"
Just leave us on this page for a second.
Q. Mr. Kiernan, in the first line it says by smed, "For
example, moving BTC to cold storage offline as soon as daily
funding estimates are reached."

Q. And this chat is dated May 4, 2012. Is that correct?
A. Yes. Sorry.
MR. HOWARD: "Smed: i should be pushing you some code
tonight or tomrrow
Smed: i'm up against multiple deadlines due to travel
schedule
Myself: stress!
Smed: :)
Smed: i'm going to finish mods to your login function
hopefully tonight
Myself: hey smed, run into some trouble with the code
you mentioned yesterday?
Smed: what code did you have problems with?
Myself: none, just wondering if you had trouble since
you said you'd push me some by now, but it sounds like you are
just busy getting out of town
Smed: actually.. i should have something in a bit"
Q. This chat begins on May 15, 2012, is that correct,
Mr. Kiernan?
A. Yes.
MR. HOWARD: "Myself: hey, got a minute?
Smed: always
Myself: thanks, just wanted to check in with you. can
you give me a quick rundown of where we've been, where we are,
where we are going in the development process? I'm getting a
bit disoriented as new things have come up since we began and I
don't have anything tangible to orient around.
Smed: Sorry about that. My bad completely
Myself: no worries, we don't exactly have the most
freedom communication wise
Smed: exactly!! I'm glad you see it.. Normally, my
development process is quite open. The nature of the firewall
between you and the rest of the world has left a large gap in
my normal way of doing things and my habits have not been
suffificently corrected to make that extra step
Smed: Where we are..
Smed: We have a fully functional "escrow management
system" in it's most raw form
Smed: it moves BTC between users, in both roles as
shoppers and merchants
Smed: admin/overlord role has the power to do anything
it wants as far as approving or rejecting transactions
Smed: this 'system' in it's current form is going
through some fine tooth comb work right now to ensure that
nothing has been missed when it comes to decimal places,
confirmations etc
Smed: existing test results have shown a high degree
of accuracy in reguards to all transactions
Smed: i have not yet been able to cheat the system,
however those final tests (trying to cheat) have not been
marked as complete yet because we have not let cimon loose on
it ;)
Smed: That side of the project is Team 1
Smed: Team 2 is working on the more public side of the
shopping system
Smed: the vendor management piece
Smed: I have had several set backs and delays in the
vendor part and that side was behind for about 3 weeks due to
the moron factor
Smed: however, team 2 came through last week with part
of 3
Smed: really where i'm at is this..
Smed: I have replaced your entire foundation.. i
probably have a little bit more efficient approach only because
hindsight is 20/20
Myself: always good to get a fresh set of eyes on a
problem
Smed: exactly
Smed: from what I have seen.. if you did it right now
i dont think you would change much from what i'm doing
17
Smed: i've focused a lot on abstraction of the
concepts
Smed: making each one of them a bit more accessable
individually
Smed: but the concepts are yours either way
Myself: well, I'm not one to hold your feet to the
fire on estimates, I know you are working hard, but are we
behind our intial estimate at this point?
Smed: I'm going to be testing the latest submission
tonight and tomorrow.. the order management stuff.. will know
more about that side afterwards
Smed: I am a little behind on part, but some of the
additional code work (ykey etc) will allow me to catch up
Myself: how does additional work equal catching up?
Smed: because i'm bringing in more people to help me
Myself: ahh
Smed: Just so it's said.. I have lots of motivation to
get this done to where I stay in your good graces"

MR. HOWARD: Ms. Rosen, can you just zoom in on the
top section maybe down to about there. It starts "On Sep. 15,
 at 17:01, Ross Ulbricht wrote," and now there's a section
with the little caret signs:
"Dear Arto. Thank you for being open to my questions.
I don't want to bother you too much, but I find this topic
fascinating and very applicable. The impression I get is that
the technology is getting close but not quite there yet.What
do you think of Tor browsing and Tor hiding services? Is it as
anonymous as they say it is? The hidden services part sounds
interesting, but I have been unsuccessful in actually accessing
any of the existing ones yet including eCache."
Ms. Rosen, can you zoom in on the bottom part and
highlight the section with the carets, please.
"With Pecunix, I understand it is a goldbacked digital
currency. Can I anonymously and securely deposit funds? Can I
anonymously and securely withdraw funds in the form of fiat
currency or gold? I can see how it would work as a closed
system, but is there a way to integrate it with the rest of the
economy securely?
"I would love to be able to set up an online
storefront that couldn't be traced back to me (Tor hidden
services?) where my customers could buy my products (revealing
their identity only to me) and transferring funds to me
anonymously and securely (Pecunix?). I suppose this is the
ideal. What are the key pieces that are currently missing that
would make this a reality. Once again, I appreciate your
willingness to discuss these matters with me."

A. Sure. The name of the folder is "Richard Page."
Q. That was in a folder called "Aliases," correct?
A. Correct.
Q. Which is, in turn, in a folder called "security," correct?
A. That's correct.
Q. What does the metadata of the document reflect about the
date that this file was first saved to the defendant's
computer?
A. 5/8/2012.
Q. Is that this reference right by the "Date Created" field?
A. Yes.
Q. And earlier you testified that there were a lot of files
with that date on them?
A. Yes.
MR. HOWARD: Can you zoom out, please.
Q. What is contained on the bottom right-hand corner of this
exhibit? What does this part of the screenshot represent?
A. Oh, the contents of the file, what was in the file. It is
a viewer for that.
Q. So we have: "Name: Richard Page. DOB: 5/13/1977.
Married. Address, or "Addr:" 11640 Gary Street, Garden Grove,
California 92840, United States. Phone is 714-620-7320. PGP
pass phrase, and then a redacted area there.
Is there text in that section that is redacted?
A. Yes.
Q. And down here we see the word KalyHost, AutoVPS, Silk Road,
staff@SilkRoad.org, correct?
A. Correct.

Q. Here we have files that are labeled inigo.jpg.gpg,
symm.tar.gz.gpg, libertas.jpg.gpg, cirrus.jpg.gpg and then
another file pics.tar.gz.gpg. Are you familiar with files with
the extension ."gpg"?'

['pics.tar.gz.gpg'? That's kind of vague. Wonder what's in it.]


MR. HOWARD: Yes, your Honor. There is an additional
witness that we plan on calling tomorrow. It is a very short
witness. It is Special Agent Gregory Fine from the Federal
Bureau of Investigation.
THE COURT: All right. And tell me why Mr. Fine is
coming in now and was not on your original list.
MR. HOWARD: Yes. Special Agent Fine is only going to
be testifying about the seizure of thumb drive devices from the
defendant's residence. The relevance of the files to the
government became more clear following what the defense
previewed in their opening statement. So he will be
authenticating the seizure of thumb drives.
Mr. Kiernan tomorrow will testify about an analysis of
files that were recovered from that thumb drive.