For the past two and a half years, the underground online marketplace Silk Road has been described as the eBay of illicit goods and services—an anonymous, electronic black market where one could find and easily purchase everything from black-tar heroin and cocaine to illegal firearms and contract killers. But yesterday, the site was shuttered in what could be the biggest Internet drug bust in history.
According to the F.B.I., Silk Road’s enigmatic alleged owner, twenty-nine-year-old Ross William Ulbricht, who until now was known only by the handle Dread Pirate Roberts, was arrested on Tuesday at a public library in San Francisco. The Silk Road Web site has since been effectively seized by the Department of Justice, along with up to four million dollars in bitcoins, the digital currency that powers the site’s transactions.
At the time of its closing, Silk Road users had nearly thirteen thousand drug listings for substances ranging from methamphetamines to LSD and marijuana; they also offered other, more dubious goods and services, like forged documents, malicious computer software, hackers for hire, and stolen bank-account credentials. (Guns and explosives were also once sold on the site, but had been removed by its owner, who limited offerings to what he considered “harmless contraband.”)
The crackdown took place just a few weeks after Forbes published a rare public interview with Ulbricht. In light of new competition from a rival drug site called Atlantis, he used the opportunity to openly promote his site for the first time, espousing radical libertarian views and claiming to have “won the State’s War on Drugs because of Bitcoin.” Some users of Silk Road’s forums, which remain operational, suspected the publicity stunt marked the beginning of the end for the site, which first appeared in 2011 and attracted more than nine hundred thousand users mainly by word of mouth.
Bitcoins, a quasi-anonymous, math-based currency whose rise in popularity closely mirrored that of Silk Road’s, were essential to the site’s secure, anonymous operation. The site made the currency virtually untraceable using a built-in laundry and escrow, which concealed the coins’ origins within Bitcoin’s public ledger, known as the “block chain.” Past estimates by Forbes placed the site’s annual revenue between thirty million and forty-five million dollars’ worth of bitcoins. The F.B.I.’s criminal complaint alleges that the site has handled approximately 1.2 billion dollars in sales, producing eighty million dollars in commissions, during its lifetime. (The figures are hard to pin down, however, due to the erratic fluctuations in the value of a single bitcoin, particularly after the shuttering of Silk Road, which caused the currency’s value to fall by twenty per cent before recovering.)
The site had been an F.B.I. target since at least the end of 2011, when undercover officers began buying drugs. But the site is designed to prevent users and transactions from being easily tracked. It doesn’t exist on the regular World Wide Web; it can be accessed only via a special browser connected to the Tor network, which provides anonymous Web browsing. Once connected, the Tor software obfuscates the origin of users and hidden services by bouncing traffic off of a series of relays located around the world.
Originally developed by the U.S. Navy, Tor is known as a tool of liberation among journalists and human-rights organizations, as well as activists living under authoritarian regimes that punish online dissent and censor large portions of the Internet. Of course, that means it also allows drug lords, child pornographers, and other cybercriminals to conduct their business in relative obscurity, a fact frequently used by governments to justify harsh crackdowns on anonymous online speech.
by Joshua Kopstein, New Yorker | Read more:
Image: Laurie Rosenwald
According to the F.B.I., Silk Road’s enigmatic alleged owner, twenty-nine-year-old Ross William Ulbricht, who until now was known only by the handle Dread Pirate Roberts, was arrested on Tuesday at a public library in San Francisco. The Silk Road Web site has since been effectively seized by the Department of Justice, along with up to four million dollars in bitcoins, the digital currency that powers the site’s transactions.At the time of its closing, Silk Road users had nearly thirteen thousand drug listings for substances ranging from methamphetamines to LSD and marijuana; they also offered other, more dubious goods and services, like forged documents, malicious computer software, hackers for hire, and stolen bank-account credentials. (Guns and explosives were also once sold on the site, but had been removed by its owner, who limited offerings to what he considered “harmless contraband.”)
The crackdown took place just a few weeks after Forbes published a rare public interview with Ulbricht. In light of new competition from a rival drug site called Atlantis, he used the opportunity to openly promote his site for the first time, espousing radical libertarian views and claiming to have “won the State’s War on Drugs because of Bitcoin.” Some users of Silk Road’s forums, which remain operational, suspected the publicity stunt marked the beginning of the end for the site, which first appeared in 2011 and attracted more than nine hundred thousand users mainly by word of mouth.
Bitcoins, a quasi-anonymous, math-based currency whose rise in popularity closely mirrored that of Silk Road’s, were essential to the site’s secure, anonymous operation. The site made the currency virtually untraceable using a built-in laundry and escrow, which concealed the coins’ origins within Bitcoin’s public ledger, known as the “block chain.” Past estimates by Forbes placed the site’s annual revenue between thirty million and forty-five million dollars’ worth of bitcoins. The F.B.I.’s criminal complaint alleges that the site has handled approximately 1.2 billion dollars in sales, producing eighty million dollars in commissions, during its lifetime. (The figures are hard to pin down, however, due to the erratic fluctuations in the value of a single bitcoin, particularly after the shuttering of Silk Road, which caused the currency’s value to fall by twenty per cent before recovering.)
The site had been an F.B.I. target since at least the end of 2011, when undercover officers began buying drugs. But the site is designed to prevent users and transactions from being easily tracked. It doesn’t exist on the regular World Wide Web; it can be accessed only via a special browser connected to the Tor network, which provides anonymous Web browsing. Once connected, the Tor software obfuscates the origin of users and hidden services by bouncing traffic off of a series of relays located around the world.
Originally developed by the U.S. Navy, Tor is known as a tool of liberation among journalists and human-rights organizations, as well as activists living under authoritarian regimes that punish online dissent and censor large portions of the Internet. Of course, that means it also allows drug lords, child pornographers, and other cybercriminals to conduct their business in relative obscurity, a fact frequently used by governments to justify harsh crackdowns on anonymous online speech.
by Joshua Kopstein, New Yorker | Read more:
Image: Laurie Rosenwald
