Silk Road Shut Down By FBI, Owner Ross William Ulbricht, 'Dread Pirate Roberts,' Arrested

The infamous Silk Road, an online black market that could be accessed by Tor, has been shut down by the FBI, and the site's owner, Ross William Ulbricht, was arrested. The FBI also seized $3.6 million worth of Bitcoins.

Agence France-Presse reported on the shutdown of Silk Road, an online black market that sold illegal drugs as well as legal goods that could be purchased using Bitcoins. In the criminal complaint filed by the FBI, special agent Christopher Tarbell said of Silk Road, which was founded in 2011, "Ulbricht has operated Silk Road on what is known as 'The Onion Router' or 'Tor network (Tor)', a special network on the Internet designed to make it practically impossible to physically locate the computers hosting or accessing websites on the network. Second, Ulbricht has required all transactions on Silk Road to be paid with 'Bitcoins,' an electronic currency designed to be as anonymous as cash." The complaint stated Silk Road sold drugs such as LSD, cocaine and heroin, guns, access to hitmen as well as hacking tools and services.

The FBI arrested Ulbricht, the site's alleged owner who went by "Dread Pirate Roberts," in San Francisco, reports Reuters. Ulbricht will be charged with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy. According to the filing, Tarbell claims that on March 29, 2013, Ulbricht wanted to hire a Silk Road user to murder another user who planned to leak the identities of thousands of individuals that were members of the site. The filing also claims Ulbricht was involved in a computer hacking scheme.

Tarbell charges that thousands of drug dealers and other illegal vendors have used Silk Road, selling hundreds of kilograms of drugs and other illegal goods to more than 100,000 users. According to the claim, "All told, the site has generated sales revenue totaling over 9.5 million Bitcoins and collected commissions from these sales totaling over 600,00 Bitcoins. Although the value of Bitcoins has varied significantly during the site’s lifetime, these figures are roughly equivalent today to approximately $1.2 billion in sales and approximately $80 million in commissions." As part of the investigation, the FBI made more than 100 purchases on Silk Road, buying cocaine, LSD and other drugs. The FBI investigation found 957,079 registered users, 30 percent of them from the United States. From Feb. 6, 2011, to July 23, 2013, the FBI recorded 1,229,465 transactions on Silk Road.

Ulbricht, according to the complaint, controlled and managed all aspects of Silk Road and would reguarly add new features to deter law enforcement. One feature was a "stealth mode" for vendors that were deemed most at risk, which would limit user access to those members who already knew the specific URL of these vendors.

As for the murder-for-hire plot, while the exchanges indicated an actual murder, Tarbell said that further investigation with Canadian officials revealed no records of a homicide and the name given by Ulbricht did not match any resident of British Columbia, the supposed location of the targeted Silk Road user.

Tarbell identifed Ulbricht as a 29-year-old who graduated from the University of Texas, Austin. The complaint includes an exhaustive history of Ulbricht's activity as well as the creation of Silk Road in January 2011.

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