FBI Busts Operator of Silk Road, Seizes $3.6M in Bitcoins
The FBI arrested Ross Ulbricht, the owner and operator of "Silk Road," an underground website that allegedly generated close to $1.2 billion in revenue in the past 30 months by trafficking in illegal drugs, malware tools, hacking services and other illicit items.
Wed, October 02, 2013
Computerworld — The FBI arrested Ross Ulbricht, the owner and operator of "Silk Road," an underground website that allegedly generated close to $1.2 billion in revenue in the past 30 months by trafficking in illegal drugs, malware tools, hacking services and other illicit items.
Law enforcement also seized close to 26,000 Bitcoins worth an estimated $3.6 million from Ulbricht. He was arrested Tuesday in San Francisco and is scheduled to appear in federal court later today."
Court documents filed in connection with the arrest described Ulbricht, 29, as a 2006 graduate of the University of Texas with a bachelor's degree in physics. Ulbricht apparently also was a graduate student at the University of Pennsylvania's School of Material Science and Engineering before allegedly dropping out to start Silk Road.
Ulbricht, who conducted business using the moniker "Dread Pirate Roberts," is accused of running a highly professional underground website that made money by connecting vendors of illegal products with hundreds of thousands of customers worldwide.
Around the time the site was taken down in September, Silk Road had more than 13,000 listings for controlled substances, including cannabis, LSD, heroin, methamphetamine, opium, and prescription drugs. The narcotics sold on the site were available in individual use quantities and in multi-kilogram packages for distribution purposes.
The site also offered services for connecting buyers to sellers of firearms and ammunition, bank account information, credit card information and even professional hitmen. Close to 170 listings offered services for items such as fake passports, Social Security cards, forged driver's licenses and fake utility bills and credit card statements for establishing proof of residence.
In July, Silk Road had more than 950,000 registered customers. More than 1.2 million transactions involving over 3,900 vendors were conducted on the site between Feb 2011 and July. The total revenue generated from these sales was around $1.2 billion, with Silk Road pocketing about $79 million by way of commissions, according to the indictment.
The site also contained a wiki with information and advice on how users could conduct transactions on the site without being caught by law enforcement. A seller's guide offered tips to drug peddlers on how to vacuum seal narcotics packages to avoid detection by sniffer dogs and electronic devices. Buyers were offered guidance on how to use fake addresses and drop boxes to safely receive illegal shipments. A private message service allowed users and vendors on Silk Road to communicate with each other in a secure and anonymous fashion.