Marketplace of vice, 'Silk Road' meets its end


By Jim Finkle

BOSTON, Oct 2 (Reuters) - Before it was shut down by U.S.agents this week, people looking to buy street drugs, hirehackers or hitmen, and acquire stolen e-commerce accountsanonymously online could go to Silk Road, the ofvice.

For more than two years, according to U.S. authorities, thewebsite allowed users to buy and sell illegal goods and serviceson the assumption that they were safe from the law. The buyerswere cloaked by technology designed to keep identities secretand transactions were processed with bitcoin digital currency.

Silk Road's alleged creator, 29-year-old Ross WilliamUlbricht, was arrested in San Francisco by FBI agents on Tuesdayafter investigators apparently linked his personal email addressto the website, which has been shut down.

Ulbricht's lawyer Brandon LeBlanc, a public defender,declined to comment.

The crackdown on Silk Road is the latest in a series ofmoves by law enforcement against digital currencies, whichcritics say are a magnet for drug transactions, money-launderingand other illegal activities.

"Silk Road has emerged as the most sophisticated andextensive criminal marketplace on the Internet today," FBI agentChristopher Tarbell said in the criminal complaint.

Based on court documents filed since the arrest, Silk Road-named for the ancient trade routes between China and the West -offered a wide array of wares.

Customers could buy a gram of cocaine for 0.8956 bitcoin, orabout $127 at an exchange rate of $142 per bitcoin. Thatexchange rate fell to as low as $110 per bitcoin on Tuesday,after the Silk Road bust was announced.

A half pound of "hydroponic bud" was running about 17.2bitcoins and 25 LSD blotters were on offer for 1.48 bitcoins,according to court filings that included screen shots of theproduct listings. Vendors showed photos of crushed white powder,marijuana, pills and other illicit-looking substances.

The website included nearly 13,000 listings for controlledsubstances as of Sept. 23, according to the court documents.

"Quality is superb ... Best stuff I've seen in a while," oneuser reported, according to the documents, saying he received ashipment of heroin overnight from a dealer known as "gotsitall5.0."

Gotsitall 5.0 charged an extra $12 to insure his product,which he described as "high quality #4 heroin all rock,"according to the documents.

Another vendor offered the services of "hitmen" operating inmore than 10 countries, according to the FBI. Tarbell said inthe complaint that buyers could also purchase firearms and theservices of hackers offering to break into ATMs and socialnetworking accounts on Facebook or Twitter.

They also sold computer viruses that could be used to attackpersonal computers, as well as access to compromised accounts ononline services such as Inc and Netflix Inc, he said.


The end for Silk Road came in the small Glen Park branch ofthe San Francisco public library system on Tuesday afternoon.

At least six plainclothes FBI agents seized Ulbricht as helingered at a corner table on the second floor near the sciencefiction section, pressing him up against a window and announcinghe was under arrest, a library spokeswoman said.

A Silk Road wiki had offered advice on how to avoid gettingcaught by authorities. A seller's guide advised sellers tovacuum seal packages containing narcotics to avoid detection bydogs or electronic sniffers, according to the complaint.

The court documents allege that altogether bitcoins worthsome $1.2 billion changed hands through the Silk Road site,which charged commissions of between 8 and 15 percent before itwas shut down after a 2 1/2-year run.

Silk Road processed all transactions with bitcoin, whichleaves no traditional money trail for investigators to follow.

The site also routed traffic through a no-cost,anti-surveillance service known as the Tor network.

Tor sends traffic through multiple virtual "tunnels" andrelays in a bid to keep Web users' identities secret. It alsoprovides "hidden services" to help websites keep the locationsof their servers confidential by routing traffic to them fromother locations.

Tor, which was originally developed with a seed grant fromthe U.S. Naval Research Laboratory, is an open source projectbacked by people who say they are concerned about internetsurveillance. It is accessible to anybody, including criminals.

The complaint describes some of the steps by whichinvestigators came to the conclusion that Ulbricht was the ownerof the site, known online as "Dread Pirate Roberts."

It said the mistakes included using a Google email address,, for communications linked to Silk Road,such as promotional material about the website dating back toJanuary 2011.

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