FBI Demolishes Internet's Drug Trafficking Silk Road
U.S. law enforcement officials have shut down Silk Road, the online marketplace that allegedly facilitated the anonymous sale of illegal drugs as well as illicit services such as murder for hire.
FBI officials also on Tuesday arrested the site's alleged founder, 29-year-old Ross Ulbricht, at a public library in San Francisco. Until the arrest, Ulbricht was known to the public only as "Dread Pirate Roberts." He is charged in a criminal complaint with narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy.
In addition, Ulbricht is accused of soliciting a Silk Road user to kill another member of the site who was threatening to release the identities of thousands more users.
The FBI did not respond to our request for further details.
Silk Road thrived on its anonymity, and it protected user identities in two ways. First, Bitcoins were the only accepted form of currency on the site, thereby avoiding the identity-revealing potential of credit cards. In addition, users had to access the site through a Tor browser that facilitates anonymous browsing.
Once on the site, users could reportedly buy and sell illegal drugs including heroin, LSD, prescription pills, ecstasy and cocaine. The site also allegedly sold nefarious goods and services, such as hit men, malicious software, forged documents, firearms, ammunition and hacking tools and services.
To buy a product, the user simply had to provide a name -- which could be fake -- and a shipping address. Silk Road shipped the product once the Bitcoin payment was processed.
Silk Road apparently had its limits, though. In an interview given to Forbes under the Dread Pirate Roberts alias earlier this year, the site's founder said that it prohibited the sale of child pornography. At the time, he also expressed fear that authorities were hunting him.
Though it is difficult to value Bitcoins over time, authorities suspect that during Silk Road's two and a half years in operation, the site generated about US$1.2 billion in sales and $80 million in commissions. So far, in addition to the arrest and shutdown of the site, authorities have seized 26,000 Bitcoins, or about $3.6 million.
Bitcoin prices plummeted following the site's closure.
Enforcing the Shutdown
Shutting down Silk Road, seizing Bitcoins and arresting a person who guarded his secrecy so intensely is quite a feat for the authorities that worked the case, said Patrick Corbett, professor at Cooley Law School.
"The agents had to have the technical knowledge to understand the system, the resources to engage in undercover dealings and a lot of patience," Corbett told the E-Commerce Times. "Tying the site to a specific person -- especially given all the steps taken to maintain anonymity -- had to be a very difficult task."
Yet the work isn't done, noted Peter Brill, an attorney at Brill Legal Group. Even if U.S. authorities are able to keep cracking down on Silk Road, other global regulators might not have the same resources or desire to stop the online marketplace from rising again.
"Without international cooperation, Silk Road or its ilk will no doubt rise again, just like The Pirate Bay did, like Backpage took over Craigslist's adult ads, and like child porn, too," Brill told the E-Commerce Times. "Any situation where a demand exists, a market will exist, as well. Now it's just online, and easier to access from Bangkok or Topeka."