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U.S. government lurked on Silk Road for over a year

Joab Jackson | Jan. 15, 2015
In order to build a case against the notorious Silk Road underground marketplace, a team of U.S. law enforcement agencies spent well over a year casing the site: buying drugs, exchanging Bitcoins, visiting forums and even posing as a vendor, although they did stop short of selling any illicit goods.

Both buyers and sellers were rated for reliability. Sellers were given instructions not to keep any buyer's mailing address, which Silk road also deleted from its own servers once the transaction was completed. Buyers could also choose to encrypt their addresses with a public key provided by the seller, so even Silk Road workers would not have access to the information.

On forums and on a Wiki, the Silk Road site also offered detailed information on how sellers could package their goods to avoid detection by law enforcement, and offered tips to buyers on how to collect such packages in ways that wouldn't get them caught. One such tip: Don't answer the bell should the postman ring to deliver the package personally.

All transactions were done through Bitcoins, which offer no methods of identifying their users. Because all Bitcoin transactions themselves are public and tracked through services like Bitcoin.info, Silk Road also offered a "tumbler" service that would further obscure the transactions by splitting them up and passing them through several Bitcoin accounts in random variations before delivering them the vendor.

Drugs were the largest group of products that Silk Road sold. By September 2013, just before the site was shuttered by law enforcement, DerYeghiayan's team had counted over 13,000 different offerings of illicit substances. The site also offered various other items of dubious legality, such as fake identification cards and computer hacking tools. A number of vendors also offered to buy Bitcoins, which users might have had left over from previous purchases.

Texas resident Ulbricht was indicted last February, after being arrested in October 2013 in California. At the time of his arrest, Ulbricht was charged with narcotics conspiracy, engaging in a continuing criminal enterprise, conspiracy to commit computer hacking, and money laundering. Both the charges of narcotics and engaging in a criminal enterprise have maximum penalties of lifetime imprisonment.

Ulbricht has pleaded not guilty to all charges.

U.S. District Judge Katherine Forrest of the Southern District of New York is overseeing the case.

 

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