Have you heard of the Silk Road? It’s been pretty big news recently. The website was the core of “the dark web” – a side of the internet that was only accessible to the uppermost of criminals.
The main person behind the Silk Road (Ross Ulbricht) was convicted for Life this week, after being prison since the 1st of October 2013. Ars Technica have published an article telling us what happened on that day:
On October 1, 2013, the last day that Ross Ulbricht would be free, he didn’t leave his San Francisco home until nearly 3:00pm. When he did finally step outside, he walked ten minutes to the Bello Cafe on Monterey Avenue but found it full, so he went next door to the Glen Park branch of the San Francisco Public Library. There, he sat down at a table by a well-lit window in the library’s small science fiction section and opened his laptop.
From his spot in the library, Ulbricht, a 29-year-old who lived modestly in a rented room, settled into his work. Though outwardly indistinguishable from the many other techies and coders working in San Francisco, Ulbricht actually worked the most unusual tech job in the city—he ran the Silk Road, the Internet’s largest drug-dealing website.
Shortly after connecting to the library WiFi network, Ulbricht was contacted on a secure, Silk Road staff-only chat channel.
“Are you there?” wrote Cirrus, a lieutenant who managed the site’s extensive message forums.
“Hey,” responded Ulbricht, appearing on Cirrus’ screen as the “Dread Pirate Roberts,” the pseudonym he had taken on in early 2012.
“Can you check out one of the flagged messages for me?” Cirrus wrote.
“Sure,” Ulbricht wrote back. He would first need to connect to the Silk Road’s hidden server. “Let me log in… OK, which post?”
Behind Ulbricht in the library, a man and woman started a loud argument. Ulbricht turned to look at this couple having a domestic dispute in awkward proximity to him, but when he did so, the man reached over and pushed Ulbricht’s open laptop across the table. The woman grabbed it and handed it off to FBI Special Agent Thomas Kiernan, who was standing nearby.
Ulbricht was arrested, placed in handcuffs, and taken downstairs. Kiernan took photos of the open laptop, occasionally pressing a button to keep it active. Later, he would testify that if the computer had gone to sleep, or if Ulbricht had time to close the lid, the encryption would have been unbreakable. “It would have turned into a brick, basically,” he said.
Then Cirrus himself arrived at the library to join Kiernan. Jared Der-Yeghiayan, an agent with Homeland Security Investigations, had been probing Silk Road undercover for two years, eventually taking over the Cirrus account and even drawing a salary from Ulbricht. He had come to California for the arrest, initiating the chat with Ulbricht—who had been under surveillance all day—from a nearby cafe.
Looking at Ulbricht’s computer, Der-Yeghiayan suddenly saw Silk Road through the boss’ eyes. In addition to the flagged message noted by Cirrus, the laptop’s Web browser was open to a page with an address ending in “mastermind.” It showed the volume of business moving through the Silk Road site at any given time. Silk Road vendors concealed their product in packages shipped by regular mail, and the “mastermind” page showed the commissions Silk Road stood to earn off those packages (the site took a bit more than 10 percent of a typical sale). It also showed the amount of time that had been logged recently by three top staffers: Inigo, Libertas, and Cirrus himself.
Ulbricht was soon transferred to a New York federal prison; bail was denied. In addition to charges of drug dealing and money-laundering, prosecutors claimed that Ulbricht had tried to arrange “hits” on a former Silk Road administrator and on several vendors. Though Ulbricht had in fact paid the money, the hits themselves were all faked—in one case, because a federal agent was behind the scheme, in another because Ulbricht appears to have been scammed using the same anonymity tools he championed.
Despite having been caught literally managing a drug empire at the moment of his arrest, Ulbricht pled not guilty. His family, together with a somewhat conspiracy-minded group of Bitcoin enthusiasts, raised a large pool of money for his defense. With it, Ulbricht hired Joshua Dratel, a defense lawyer who has handled high-profile terrorism trials.
Dratel did not reach any sort of plea deal with the government, as is common in such cases. Beyond a general insistence that his client was not, in fact, the Dread Pirate Roberts, Dratel offered no public explanation of what had happened in the Glen Park library—until January 2015, when the case went to trial at the federal courthouse on Pearl Street in lower Manhattan.
“Ross is a 30-year-old, with a lot at stake in this trial—as you could imagine,” Dratel said in his opening statement, addressing the jury in a low-key voice. “This case is about the Internet and the digital world, where not everything is as it seems. Behind a screen, it’s not always so easy to tell… you don’t know who’s on the other side.”
Ulbricht, he said, was only a fall guy, the stooge left holding the bag when the feds closed in; the “real” Dread Pirate Roberts was still at large. But would the jury buy this unlikely story?
The Silk road was a massive network of servers that provided a website to be able to buy almost every drug and illegal substance known to man. Upon login, users could see pictures of the substances and be able to access other tools such as hacking tools, fake ID’s and an illegal coupon scheme. All of which were held against Ulbricht in his trial. The site operated with a simple interface and had extensive user forums, providing a similar experience to Ebay and Craigslist. The website itself had no contact with drugs; it linked buyers and sellers together then taking a percentage of each transaction.
To access the website you had to use two technologies. Tor and Bitcoin. Tor was developed by the US navy originally and now managed by a nonprofit organization. It helped anonymize traffic by routing between several servers and encrypting the traffic on its way through.Bitcoin is known as a cryptocurrency; also an anonymous method for paying money to other anonymous people.
In July 2013, Der-Yeghiayan scored a bigger prize, taking over the account of a Silk Road staffer named “Cirrus.”
“Cirrus has always been dedicated to our community at large,” Dread Pirate Roberts explained in a private message introducing Cirrus to his small group of administrators shortly before Der-Yeghiayan took over the account.
Adopting Cirrus’ identity, Der-Yeghiayan earned 8 bitcoins a week—about $1,000 at the time—for moderating forum posts. After several weeks, he got a raise to 9 bitcoins a week. He was paid right up until the Silk Road site was shut down in October 2013.
For two years, Der-Yeghiayan worked the case without ever knowing DPR’s real name; he learned about “Ross Ulbricht” from another office just days before the arrest.
Homeland Security Investigations began making purchases from Silk Road, many of them under an account taken over from an existing site user called “dripsofacid.” (Various law enforcement agencies created their own accounts on Silk Road during its existence, but they also took over others after arresting their owners.)
When HSI made their controlled buys, they had the shipments sent to a name and address they used specifically for undercover purchases. Investigators compared the product received to the listing on Silk Road to confirm its origin. One purchase shown to the jury was 0.2 grams of brown heroin, bought from a seller in the Netherlands. The packaging was professional—the heroin tucked inside several plastic bags, which were themselves contained in a vacuum-sealed pouch, which was invisible behind a bluish sheet of paper.
Ultimately, HSI made 52 undercover buys from more than 40 distinct Silk Road dealers in 10 different countries. The drugs were all tested, and all but one purchase resulted in genuine goods. Silk Road, whatever one thought of it, worked as a market.
On the darknet, drugs are still available. But nowhere near the Silk Road has been seen, before or since. “Silk Road 2.0,” launched within a few months of Ulbricht’s arrest, lasted less than a year until its alleged creator, 25-year-old Blake Benthall, was arrested in San Francisco.
The most popular Silk Road successor, a darknet site called Evolution, shut down without warning in March—when its founders apparently emptied out the $12 million in its escrow system and ran. This sort of “exit scam” was the type of large-scale theft that users of such markets always knew was possible.
Any sense that the darknet could be a safe haven has now been shattered but Silk Road began years earlier, when the dream of creating a cryptographically protected libertarian utopia right in the midst of conventional society still seemed a reasonable proposition. But it was never likely to succeed for long—a fact that Ulbricht has now learned the hard way.
Thank you to ArsTechnica for providing us with this information
Image courtesy of DailyDot