fbpx
Thursday, 26 March 2020 19:31

Silk Road – Tale of first darknet market

Author:   [Source: This article was published in darkweb.wiki]

Silk Road was an internet black market and the first modern-day darknet market. It was founded by Ross William Ulbricht (also known as Dread Pirate Roberts) born in Texas, the U.S. who had a different ideology.

He believed everyone should have the right to buy, sell whatever they want as long as they did not harm anyone.

If we summarise it, it made Ulbricht a millionaire, and later a convict.

It may sound like a Hollywood movie but it is true. Hollywood actor Keanu Reeves narrated a 2015 documentary on the Silk Road legend called Dark Web which chronicles the rise and fall of the black market and its founder.

 

Initial Days

SilkRoad was first launched in February 2011. Ulbricht started his dark web marketplace development in 2010. It was a side project to Good Wagon Books. The project was designed to use Tor and bitcoin. It was destined that his marketplace to become the catalyst for a revolution.

When it started, there were a limited number of new seller accounts available. So, every new seller has to purchase a merchant account in an auction. Later, each merchant has to give a fixed fee.

How did it work?

As it operated as a Tor hidden service, communications on Silk Road were considered by users to be entirely anonymous. Besides, transactions on Silk Road could only be made using bitcoins.

For customers, the main benefit it had over its rivals was that it was trustworthy.

Same like eBay, it would match consumers and dealers, allows both parties to rate each other, and provide products to be delivered directly to customers’ doors by the unsuspecting mail service.   

Silk Road 1.jpg

His website connected nearly 4,000 drug traders around the world to sell their drugs to more than 100,000 buyers, and could you get you anything you want from fake documents to top-quality heroin.

It is estimated that in its very short span, over $1 billion transferred through Silk Road, giving Ulbricht a secret fortune of an estimated $28 million at the time of his arrest.

 

Products in Silk Road

Initial listings on Silk Road were to be restricted to products that resulted in ‘victimless crimes’. On that foundation, products linked to the likes of stolen credit cards, assassinations, weapons of mass destruction and child pornography were banned.

Silk Road 2.jpg

Ulbricht became unwilling or unable to maintain the standards that he had initially set and indeed had relaxed the policy on banning the sale of weapons based on a view that increased firearm regulations were making it harder for people to purchase guns, in contrast with his libertarian values. Furthermore, as the site evolved, more and more ‘contraband’ products began to be listed.

There were also legal goods and services for sale, such as apparel, art, books, cigarettes, erotica, jewelry, and writing services. A sister site, called “The Armoury”, sold weapons (primarily firearms) during 2012, but was shut down, due to a lack of demand.

The End of the Silk Road

Although the authorities were aware of the existence of Silk Road within a few months of its launch, it took over two years from that time for Ulbricht’s identity to be revealed.

Ulbricht may have included a reference to Silk Road on his LinkedIn page, where he discussed his wish to “use economic theory as a means to abolish the use of coercion and aggression amongst mankind” and claimed, “I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.” Ulbricht moved to San Francisco before his arrest.

Ulbricht was first connected to “Dread Pirate Roberts” by Gary Alford, an IRS investigator working with the DEA on the Silk Road case, in mid-2013.

The connection was made by linking the username “altoid”, used during Silk Road’s early days to announce the website and a forum post in which Ulbricht, posting under the nickname “altoid”, asked for programming help and gave his email address, which contained his full name.

 

On an October afternoon in a public library in San Francisco, Ross Ulbricht’s dream of an online libertarian paradise came to a sudden end. The FBI had finally caught up with Ulbricht having infiltrated the Silk Road.

At the time of his arrest, he was logged into Silk Road as an administrator and using his Dread Pirate Roberts alias to unknowingly communicate with an undercover FBI agent. Agents found that Ulbricht’s laptop had tens of millions of dollars of bitcoin on it, with millions more stored on USB drives found in his apartment.

The computer also contained Ulbricht’s private journal, which contained damning evidence against him. Within hours of his arrest, Silk Road’s domain had been seized, the market was shut down and Ross Ulbricht’s grand plans to make the world a better place were in disarray.

Silk Road 3.jpg

Aftermath – Silk Road

As part of their investigation into Silk Road, the FBI had caught up with several other Silk Road users and administrators while hunting for Dread Pirate Robert. Prosecutors alleged that Ulbricht paid $730,000 to others to commit the murders, although none of the murders occurred.

The FBI initially seized 26,000 bitcoins from accounts on Silk Road, worth approximately $3.6 million at the time. An FBI spokesperson said that the agency would hold the bitcoins until Ulbricht’s trial finished, after which the bitcoins would be liquidated.

In October 2013, the FBI reported that it had seized 144,000 bitcoins, worth $28.5 million and that the bitcoins belonged to Ulbricht.

The complaint published when Ulbricht was arrested included information the FBI gained from a system image of the Silk Road server collected on 23 July 2013. It noted that “From February 6, 2011, to July 23, 2013, there were approximately 1,229,465 transactions completed on the site. The total revenue generated from these sales was 9,519,664 Bitcoins, and the total commissions collected by Silk Road from the sales amounted to 614,305 Bitcoins. These figures are equivalent to roughly $1.2 billion in revenue and $79.8 million in commissions, at current Bitcoin exchange rates…”, according to the September 2013 complaint, and involved 146,946 buyers and 3,877 vendors.

On 27 June 2014, the U.S. Marshals Service sold 29,657 bitcoins in 10 blocks in an online auction, estimated to be worth $18 million at contemporary rates and only about a quarter of the seized bitcoins. Another 144,342 bitcoins were kept which had been found on Ulbricht’s computer, roughly $87 million.

Trial

Ulbricht’s trial began on 13 January 2015 in federal court in Manhattan. At the start of the trial, Ulbricht admitted to founding the Silk Road website but claimed to have transferred control of the site to other people soon after he founded it.

In the second week of the trial, prosecutors presented documents and chat logs from Ulbricht’s computer that, they said, demonstrated how Ulbricht had administered the site for many months, which contradicted the defense’s claim that Ulbricht had relinquished control of Silk Road. Ulbricht’s attorney suggested that the documents and chat logs were planted there by way of BitTorrent, which was running on Ulbricht’s computer at the time of his arrest.

On 4 February 2015, the jury convicted Ulbricht of seven charges, including charges of engaging in a continuing criminal enterprise, narcotics trafficking, money laundering, and computer hacking. He faced 30 years to life in prison.

The government also accused Ulbricht of paying for the murders of at least five people, but there is no evidence that the murders were carried out, and the accusations never became formal charges against Ulbricht.

During the trial, Judge Forrest received death threats. Users of an underground site called The Hidden Wiki posted her personal information there, including her address and Social Security number. Ulbricht’s lawyer Joshua Dratel said that he and his client “obviously, and as strongly as possible, condemn” the anonymous postings against the judge.

 

In a letter to Judge Forrest before his sentencing, Ulbricht stated that his actions through Silk Road were committed through libertarian idealism and that “Silk Road was supposed to be about giving people the freedom to make their own choices” and admitted that he made a “terrible mistake” that “ruined his life”.

On 29 May 2015, Ulbricht was given five sentences to be served concurrently, including two for life imprisonment without the possibility of parole. He was also ordered to forfeit $183 million. Ulbricht’s lawyer Joshua Dratel said that he would appeal the sentencing and the original guilty verdict.

On 31 May 2017, the United States Court of Appeals for the Second Circuit denied Ulbricht’s appeal and affirmed the judgment of conviction and life sentence.

Ulbricht’s family continues to campaign to “free Ross Ulbricht from a barbaric, double life sentence for all non-violent charges”, with a website in place to accept donations towards lawyer fees.

 [Source: This article was published in darkweb.wiki - Uploaded by the Association Member: Anthony Frank]

airs logo

Association of Internet Research Specialists is the world's leading community for the Internet Research Specialist and provide a Unified Platform that delivers, Education, Training and Certification for Online Research.

Get Exclusive Research Tips in Your Inbox

Receive Great tips via email, enter your email to Subscribe.

Follow Us on Social Media

Finance your Training & Certification with us - Find out how?      Learn more