Silk Road, an online marketplace dedicated to the trafficking of illegal goods, was shut down this week by the FBI. The site’s alleged operator, Ross Ulbricht, was arrested on charges related to the site.
The site was based on virtual currency bitcoin and used to anonymously sell “illegal drugs of nearly every variety” and other “illicit goods and services, including malicious software designed for computer hacking, such as password stealers, keyloggers, and remote access tools,” according to the complaint.
Sen. Charles Schumer (D-N.Y.) – who had called for the site’s closure – applauded the Department of Justice and the Drug Enforcement Administration for taking down the site.
“The country is safer now that this open market for law-breaking has been shuttered,” he said in a statement. “Sayonara to Silk Road.”
According to the complaint, the currently unregulated currency bitcoin has “known legitimate uses,” but it is “also known to be used by cyber criminals for the money-laundering purposes, given the ease with which they can be used to move money anonymously.”
In a blog post, Jerry Brito, director of George Mason University’s Technology Policy Program, noted, “Bitcoin was in no way involved in the identification of the suspect.”
“In this case at least, the privacy Bitcoin affords was not compromised in any way,” he wrote.
The complaint discussed the steps Ulbricht took to ensure that Silk Road users could not be identified, including by law enforcement officials.
The site operated on the Tor network, “a special network on the Internet designed to make it practically impossible to physically locate the computers hosting or accessing websites on the network,” the complaint said.
Tor communications are “bounced through numerous relays within the network, and wrapped in numerous layers of encryption,” making it “practically impossible to find the communication’s origin,” it continued.
Allegedly Ulbricht was ready to resort to violence to protect the privacy of Silk Road users.
According to the complaint, he “solicited a murder-for-hire of a certain Silk Road user, who was attempting to extort money from [Ulbricht] at the time, based on threats to release the identities of thousands of Silk Road users.”
In his post, Brito speculated that law enforcement agents may have identified Ulbricht through Tor vulnerabilities or by intercepting a package of Ulbricht's counterfeit identifying documents, which the complaint said was part of a routine border search.
"If this indeed was a 'routine' search, the the authorities got completely lucky!" Brito wrote.