Mark Karpeles, CEO of Mt. Gox bitcoin exchange
Mark Karpeles, CEO of the closed bitcoin exchange Mt. Gox, has consistently denied the assertion that he, as Dread Pirate Roberts, operated the Silk Road drug market. Reuters/Yuya Shino

Was Ross Ulbricht framed? And if so, who is the infamous "Dread Pirate Roberts," the nickname used by the mastermind of the Silk Road, the online drug bazaar, where everything from marijuana to black tar heroin were available to be purchased for the right amount of bitcoin.

The defence for Ulbricht, the 30-year-old Texas native standing trial in federal court accused of being Dread Pirate Roberts (DPR), tried last week to introduce doubts by proposing other possible perpetrators, such as Mark Karpeles, the CEO of the Mt. Gox bitcoin exchange. Karpeles was one of the Department of Homeland Securty's original suspects, in part because he would have benefited mightily from the rising value of the anonymous online currency.

Ulbricht has pleaded not guilty to all charges since he was arrested and the Silk Road was shut down in October 2013. When his trial began in Mahattan federal court last week attorney Joshua Dratel argued that Ulbricht was one of a number of Dread Pirate Roberts' involved in operating the Silk Road. He advanced that theory for the jury by asking witness Jared Der-Yeghiayan, an investigator with the Department of Homeland Security, if he ever believed Karpeles was running the Silk Road under the Dread Pirate Roberts nickname.

But that strategy was dealt a significant blow Tuesday when Judge Katherine Forrest, ruling on a motion from the prosecution, determined the testimony was based only on Der-Yeghiayan’s “beliefs,” not “competent evidence,” and thus constituted hearsay.

“My intent is to give the jury the general instructions that his suspicions and conclusions are to be struck from the record,” Forrest said.

“Now I have to go back and reconstruct,” Dratel responded, as quoted by Ars Technica. “I’m not sure I can proceed.”

“I’m done with the issue,” said Forrest. “I’m not suggesting you should like it.”

Judge Forrest ruled that Dratel could still pursue “alternative perpetrator” theories, something he previously hinted would continue through the trial, though forbid him from questioning witnesses on what they thought or felt (hearsay). Among the admissible evidence are documents proving Karpeles’ ties to the website, which gave visitors instructions on how to access the Dark Net drug bazaar.

Karpeles has consistently denied ever acting as the Dread Pirate Roberts. He was named as a possible suspect before Ulbricht’s arrest in 2013 because Karpeles, as the CEO of the prominent Mt. Gox exchange, would have stood to gain if bitcoin, the only currency permitted on the Silk Road, became more valuable.