FBI seizes underground drug market Silk Road, owner indicted in New York
It appears the Federal Bureau of Investigation has finally cracked down on Silk Road, the underground marketplace where users could buy cocaine, heroin, meth, and more using the virtual currency Bitcoin. Journalist Brian Krebs has just published a purported copy of a complaint filed in the Southern District of New York against Ross Ulbricht, who is alleged to be the mastermind behind the site and the handle Dread Pirate Roberts.
Ulbricht is being charged with narcotics trafficking conspiracy, computer hacking conspiracy, and money laundering conspiracy. The site, which is only accessible through the anonymizing Tor network, has been pulled and replaced with an FBI notice. The Silk Road forums are still operating, suggesting they were hosted on a different server.
The complaint is based on statements made by Christopher Tarbell, an FBI agent who has been tracking Silk Road out of the cybercrime division in New York. Tarbell acknowledges "undercover activity" by himself and other law enforcement agents, something users have suspected for a long time.
Law enforcement officers have made more than 100 purchases on the site
Law enforcement officers have made more than 100 purchases on the site since November of 2011, according to the complaint, and had the drugs shipped to New York for analysis. "Samples of these purchases have been laboratory-tested, and have typically shown high purity levels of the drug the item was advertised to be on Silk Road," Tarbell says.
Silk Road did $1.2 billion worth of business between February of 2011 and July of 2013, the FBI says, earning Dread Pirate Roberts $79.8 million in commissions using current Bitcoin rates. That number is difficult to pin down, however, because Bitcoin's price has fluctuated so much during that time. Silk Road had 957,079 registered users who did 1.2 million transactions between February of 2011 and July of 2013, the FBI says.
The FBI reportedly located the server in "a certain foreign country" on which the Silk Road website was hosted, but does not specify where. It appears from the complaint that the FBI was monitoring Dread Pirate Roberts' private messages through the site.
Dread Pirate Roberts once ordered a murder of a user who was attempting to blackmail him, the complaint alleges. A user named FriendlyChemist wanted $500,00 from Dread Pirate Roberts, or else thousands of Silk Road identities would be published. When quoted a price of $150,000 to $300,000, Dread Pirate Roberts called the price high, saying he had had a hit done "not long ago" for $80,000. Ulbricht was not charged with murder.