Silk Road, considered one of Bitcoin's darker uses, was shut down by the FBI on Wednesday. (Zach Copley/Flickr)

Law enforcement authorities in the US have seized and shut down the alleged drug marketplace "Silk Road", while also arresting the site's owner Ross Ulbricht, after seizing over $3.6 million worth of the cyber-currency Bitcoin.

The allegations against Ulbricht stated that Silk Road generated transactions that in total was valued over $1.2 billion, with over 9.5 million Bitcoins used by more than 900,000 registered users since 2011. Silk Road also reportedly offered lessons in how to hack ATMs, while also featuring contact information for black market traders, gun dealers and hitmen.

Christopher Tarbell, an FBI agent, was quoted as saying –

"Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today. The site was used by several thousand drug dealers to sell hundreds of kilograms of illegal drugs."

While Silk Road came to light as one of many potentially precarious uses of Bitcoin, many Bitcoin-enthusiasts were encouraged by the end of Silk Road. 

Patrick Murck, who works with the Bitcoin Foundation, said –

"I think in general it's a positive thing. It demonstrates quite clearly that the illicit activity on the Bitcoin network is a tiny percent of what people use the currency for. If you believe that the useful purpose for Bitcoin was to conduct illicit activity, you'd expect the price to be zero without the Silk Road. And it's not."

The value of the cyber-currency fluctuated after Silk Road was shut down, dropping about $30 from $140 on Wednesday morning to $110 on Wednesday afternoon, but quickly regaining its value, trading at about $127 around 4pm.

Fred Ehrsam, co-founder of the startup Coinbase, a Bitcoin wallet and platform, said –

"I think it’s a huge positive. This kind of takes the biggest target that people might speak negatively about when it comes to Bitcoin, and takes it off the map."

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