Ross William Ulbricht, 29, was ordered held without bail.
Assistant U.S. Attorney Serrin Turner said Ulbricht had spent most of three years "evading law enforcement, living a double life" while operating an underground website known as Silk Road, a black-market bazaar for cocaine, heroin and other drugs.
Turner said the website also offered malicious computer software and fake identification documents as several thousand vendors distributed goods to more than 100,000 customers.
Turner said Ulbricht sent $730,000 to others this year to carry out the killings of six people to silence witnesses and to protect him and his financial interests. In court papers, prosecutors said five murders were to take place in British Columbia. With the sixth person, Ulbricht was dealing with an undercover agent, prosecutors said.
"Thankfully, it appears so far those murders did not happen," Turner said.
Defence lawyer Joshua Dratel argued for bail, saying, "He's reliable and will honour that obligation."
Ulbricht was arrested Oct. 1 at a San Francisco public library, where he was swarmed by FBI agents who seized his computer, Turner said.
He was charged in Manhattan with conspiring to commit narcotics trafficking, conspiring to commit computer hacking and conspiring to commit money laundering for a scheme that the government said stretched from January 2011 through September. He is charged separately in federal court in Baltimore in an attempted murder-for-hire scheme.
Turner said conviction in the cases could bring a mandatory minimum 10 years in prison and a maximum of life.
In court papers, the government said investigators found a computer entry by Ulbricht in which he described starting Silk Road in early 2011, saying he wanted to "create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them."
In its court papers, the government said the website vastly expanded the geographical reach of drug dealers.
Outside court, Ulbricht's mother, Lyn Ulbricht, said: "I can tell you he's not a murderer, not a violent person."
She said she was heartbroken that he was detained.
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