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Prosecutors in New York today said that federal agencies accept taken over the Silk Road, a sprawling underground Web armpit that has becoming abomination as the “eBay of drugs.” On Tuesday, federal agents in San Francisco arrested the Silk Road’s declared mastermind. Prosecutors say 29-year-old Ross William Ulbricht, a.k.a “Dread Pirate Roberts” (DPR), will be answerable with a ambit of bent violations, including cabal to accomplish biologic trafficking, and money laundering.
The Silk Road is an online atramentous bazaar that as backward as aftermost ages was hosting about 13,000 sales listings for controlled substances, including marijuana, LSD, heroin, cocaine, methamphetamine and ecstasy. Much like eBay sellers, merchants on the Silk Road are evaluated by antecedent buyers, who are encouraged to leave acknowledgment about the affection of the seller’s appurtenances and services.
The Silk Road is not accessible via the approved Internet. Rather, it is abandoned attainable via the Tor network, an anonymity arrangement that bounces its users communications beyond a broadcast arrangement of relays run by volunteers all about the world.
That is, it was until this week, aback FBI agents arrested its declared freeholder and bedeviled the Web servers active the site. The admiral additionally replaced the Silk Road’s home folio with a bulletin adage that the armpit had been bedeviled by the FBI, Homeland Security Department and the Biologic Administration Administration.
According to a complaint apparent this week, Ulbricht alone controlled the massive profits generated from the operation of the business. The government alleges that Ulbricht also controlled and oversaw all aspects of the Silk Road, including: the aliment of the computer basement and programming cipher basal the Silk Road Web site; the assurance of bell-ringer and chump policies; decisions about what could be awash on the site; and managing a baby agents of online administrators who assisted with the circadian operations.
The Silk Road didn’t aloof advertise drugs. For example, the complaint identifies 801 for-sale listings beneath “digital goods,” which included cyberbanking Trojans, pirated content, and afraid accounts at Netflix and Amazon. The “forgeries” area of the Silk Road featured 169 ads from vendors of affected driver’s licenses, passports, Amusing Security cards, account bills, acclaim agenda statements, car allowance records, and added forms of character documents.
Another accepted area of the Silk Road included 159 listings for all-encompassing “Services,” mostly those listed by computer hackers alms such casework as hijacking Twitter and Facebook accounts of the customer’s choosing. Added classified ads promised the auction of bearding coffer accounts, affected bills, accoutrements and ammunition, and even hitmen for hire.
FBI board said that on or about March 29, 2013, Ulbricht contacted a Silk Road abettor “Redandwhite” to see about hiring him to to booty out addition Silk Road user — addition activity by the appellation “FriendlyChemist” — who was aggressive to absolution the identities of bags of users of the site.
From the government’s complaint: “Asked what array of botheration FriendlyChemist was causing him, DPR responded in a bulletin anachronous March 30, 2013, ‘[H]e is aggressive to betrayal the identities of bags of my audience that he was able to acquire….[T]his affectionate of behavior is unforgivable to me. Especially actuality on Silk Road, anonymity is sacrosanct.’” As to the murder-for-hire job he was soliciting, DPR commented that “[i]t doesn’t accept to be clean.”
Later that aforementioned day, redandwhite beatific DPR a bulletin commendation him a amount of $150,000 to $300,000, “depending on how you appetite it done, ‘clean’ or ‘non-clean’.
On March 31, DPR began haggling over the price, responding: “Don’t appetite to be a affliction here, but the amount seems high. Not continued ago, I had a apple-pie hit done for $80k. Are the prices you quoted the best you can do? I would like this done asap as he is talking about absolution the admonition on Monday.”
According to investigators, the two ultimately achieve on a amount of $150,000, and that Ulbricht paid for the transaction application Bitcoins — an bearding basic bill — sending the ambitious hit man 1,670 bitcoins for the abiding hit. Bitcoin bill ante alter absolutely a bit from day to day, but celebrated sites that clue Bitcoin ante appearance that one bitcoin about that date in backward March 2013 was account about USD $90, acceptation board accept Ulbricht paid about $150,300 for the hit.
The government’s complaint states that the hit wasn’t agitated out, but it additionally doesn’t assume that FriendlyChemist was the antecedent of investigators’ breach in this case. That would appear on July 23, 2013, aback board acquired admission to a Silk Road server and fabricated a complete archetype of the abstracts on the machine.
Nicholas Weaver, a researcher at the All-embracing Computer Science Institute (ICSI) and at University of California San Diego, said the admonition independent on the server bedeviled by board indicates that Ulbricht/Dread Pirate Roberts commonly bootless to heed his own admonition to adolescent Silk Road users: Prominent on the Silk Road armpit were links to tutorials DPR bound which laid out the technologies and techniques that users should accept if they appetite to accumulate off the alarm of federal investigators.
“This shows me that the arch of the Silk Road wasn’t application [encryption] for all his communications, because [the government] wouldn’t accept all of this admonition otherwise, unless of advance he stored his encryption key on the server that was seized,” Weaver said. “Either [the government] got his encryption key off of this server or addition server that they were able to access, or he wasn’t application encryption at all.”
The complaint additionally suggests that in June 2013, Ulbricht accessed a server acclimated to ascendancy the Silk Road armpit from an Internet bistro that was 500 anxiety from the auberge he was blockage at in San Francisco.
“In added words, he wasn’t alike application Tor to administrate the Silk Road,” Weaver said. “Given that, it’s amazing that he was able to accumulate this armpit active for three years.”
Other amateur mistakes additionally contributed to DPR’s identification as Ross William Ulbricht. In 2011, a being application the appellation “Altoid” acquaint a animadversion to the Bitcoin Talk appointment aggravating to get users there to appointment the Silk Road. After in the year, Altoid acquaint afresh on the Bitcoin Talk forum, this time gluttonous an “IT pro” in the Bitcoin association to advice with Silk Road administration. In that comment, he acquaint his Gmail address, the capacity of which were after subpoenaed by federal investigators.
Finally, DPR tripped himself up aback he ordered some affected IDs from an all-embracing Silk Road bell-ringer and had them beatific to his residence. The counterfeit IDs were intercepted at the bound by community agents alive with the U.S. Department of Homeland Security, which paid a appointment to the abode to which the abstracts were to be delivered. The agents acclaimed that while Ulbricht banned to acknowledgment any questions about the declared purchase, one of the character abstracts was a California driver’s authorization address Ulbricht’s photo and accurate date of birth, but with a altered name.
A cardinal of association on Twitter, Reddit and added communities are bond to several identities on amusing media platforms that bout up with timelines in the government’s complaint, including this contour on LinkedIn, and this folio at Google Plus. According to folio 24 of the government’s complaint, Ulbricht accelerating from the University of Texas with a bachelors amount in Physics in 2006. From 2006 to 2010, he abounding alum academy at the University of Pennsylvania Academy of Materials Science and Engineering.
The government’s assay into the Dread Pirate Roberts and Silk Road clearly began aback in November 2011, aback law administration agents began authoritative a alternation of added than 100 abandoned clandestine purchases of controlled substances from Silk Road vendors. Now, abounding of those vendors — and their barter — accept to be apprehensive how continued it may be afore board appear animadversion on their doors.
“If I were a abettor on the Silk Road, I’d be abashed appropriate now,” Weaver said. “Any client that didn’t use encryption now has their Silk Road letters seized. The FBI may accept the sellers’ aircraft addresses for their customers, and for the sellers, the FBI knows the Bitcoin payout addresses, so again it’s a amount of archetype the Bitcoin wallets from there.”
Weaver acicular to assay by Sara Meiklejohn, a alum apprentice at the University of California, San Diego who’s been allegory the role of bitcoin and anonymity on the Silk Road. Meiklejohn’s study, A Fistful of Bitcoins: Characterizing Payments Among Men with No Names — to be appear in October 2013 at the ACM Internet Measurement Conference in Barcelona, Spain — lays out altered methods that could be acclimated to tie Bitcoin wallets to specific individuals.
According to a columnist absolution beatific out by the appointment of the U.S. Attorney for the Southern District of New York, Ulbricht will be presented in San Francisco today. He is answerable with cabal to cartage in narcotics, computer hacking conspiracy, and money laundering.
The ICSI’s Weaver said that if bedevilled on the biologic accuse alone, Ulbricht is adverse activity in prison.
“The biologic trafficking counts accommodate the weights of the drugs, which makes me anticipate that the government wants to bandy the book at this guy,” Weaver said, acquainted that those weights backpack binding sentences. “The biologic accuse abandoned accept a 30 year binding minimum.”
The government addendum in its complaint that best of the biologic pushers on the Silk Road awash packets of drugs for abandoned use (for an archetype of this, assay out the 13 packets of heroin that a cyber fraudster ordered off of the Silk Road in July and had beatific to my home in a adulterated attack to anatomy this reporter). But Weaver said the government can allegedly accumulated abounding altered abandoned biologic accuse because he acted in a role to advice facilitate those sales. For example, accepting bankrupt for possessing or affairs one kilogram of heroin carries a book of 10 years to life.
“That’s why I anticipate those weight numbers are in the complaint adjoin him,” Weaver said. “They’re acquisitive these will activate binding minimum sentences.”
The government additionally appear today that pursuant to this action, it has bedeviled about 26,000 Bitcoins account almost $3.6 million, in what it’s calling the better anytime access of Bitcoins.
A archetype of the complaint is accessible actuality (PDF). Apologies for not hosting it on my site, but aback I did that earlier, the mad blitz from Reddit readers broiled my site.
Update, 3:02 p.m. ET: An beforehand adaptation of this adventure afield declared that Ulbricht was answerable with attempted murder. While the government’s complaint lays out that declared conspiracy, it does not accompaniment that he was answerable with attempted murder….yet.
Update, 5:47 p.m. ET: As Reuters reports, the amount of Bitcoin agenda bill alone today, falling to $129 per bitcoin from $140 a day before.
Update, 11:52 p.m. ET: The law blog Popehat has got a abundant assay of the accuse adjoin Ulbricht, and has alike dug up a abstracted complaint (PDF) adjoin Ulbricht appear Oct. 2 by the U.S. District Court for the District of Maryland that levies abounding of the aforementioned charges, including attempted murder. According to this indictment, Ulbricht allegedly ordered what appears to be a abstracted hit. It looks like this is the added hit job Ulbricht allegedly copped to in the archetype quoted in the capital adventure above: Board produced a babble log assuming Ulbricht adage a antecedent hit he ordered abandoned amount $80,000, and in this Maryland complaint says Ulbricht fabricated two payments of $40,000 for this hit job. In this case, the “hit man” Ulbricht allegedly assassin was an clandestine federal agent.
Tags: Dread Pirate Roberts, ICSI, All-embracing Computer Science Institute, Nicholas Weaver, Ross William Ulbricht, Silk Road, Tor network
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