The FBI has seized the domain of a website called Silk Road , considered one of the most popular illegal online "hangouts" for buying drugs and other illegal products and services.
Authorities arrested the site's alleged founder, Ross William Ulbricht, also known as “Dread Pirate Roberts,” in San Francisco, who was allegedly in possession of 26,000 Bitcoins worth $3.6 million.
In conducting its investigations, the FBI used information from telecommunications provider Comcast and collaborated with Customs and Border Patrol, the Internal Revenue Service, the Drug Enforcement Administration, and the Department of Homeland Security.
Ross William Ulbricht, who is 29 years old and a graduate of the Department of Materials Science and Engineering at the University of Pennsylvania, is charged with conspiracy, drug trafficking, hacking attacks on information systems and money laundering from illegal activities.
The website 'Silk Road', which was operating since early 2011, even offered "lessons" on ATM hacking, black market contact lists, counterfeiters, selling weapons, and hiring henchmen.
The website was only accessible through the Onion [Tor] router , which is an anonymous web browser for Tor networks and allows certain websites to operate without being detected by authorities. This is achieved by routing the connection through several different layers of anonymity to make it more difficult to trace the unique IP address.
Court documents state that, on March 29, Ulbricht asked a Silk Road user to murder another user who threatened to reveal the names of thousands of the website's users.
The FBI also reports that Ulbricht's LinkedIn profile highlights his motivations for operating the drug market:
“I love learning and using materials to better understand the world around me. So it was natural for me to study physics in college and work as a researcher for five years. I published my findings in international scientific journals five times during that time, first on organic solar cells and then on EuO thin-film crystals. My goal during that period of my life was simply to expand the frontiers of human knowledge.
Now, my goals have changed. I want to use economic theory as a means to abolish the use of coercion and oppression among humanity. Just as slavery has now been abolished almost everywhere, I believe violence and the imposition of all forms of violence by one person on another can be ended. The most widespread and systematic use of violence is between institutions and governments. So that is my current endeavor. To that end, I have created an economic simulation to give people a firsthand experience of what it would be like to live in a world without the use of systemic state violence.”
Users of the website conducted transactions using an anonymous form of digital currency called Bitcoins. Bitcoin is an anonymous virtual currency that has often been used by criminals to maintain anonymity in payment transactions. This method has become a major currency for cybercriminals after the closure of Liberty Reserve due to the unique anonymity features it provides.
The news of the shutdown of Silk Road appears to have hurt the value of Bitcoin, and the currency's value has fallen by around 20%.
In recent months, federal authorities have charged seven people believed to be connected to Liberty Reverse, which prosecutors describe as a $6 billion business, with money derived from illegal activities facilitating black market transactions ranging from buying stolen identities to child pornography.
This is a major blow to cybercrime while law enforcement authorities work to better address similar cybercrime.
