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Silk Road Founder Arrested, Bitcoin Drug Site Shutdown
Silk Road Founder Arrested, Bitcoin Drug Site Shutdown
By Seth Fitzgerald / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
OCTOBER
02
2013
An online drug -- and potentially murder-for-hire -- market called the Silk Road has been shut down after the FBI arrested its alleged proprietor and seized data from the marketplace. The Silk Road reportedly had millions of dollars in Bitcoin sales.

The Silk Road's owner has been arrested and, as of right now, is being charged with narcotics trafficking, computer hacking, soliciting a murder-for-hire and money laundering, according to a complaint unsealed Wednesday. The owner "Dread Pirate Roberts" as Ross Ulbricht called himself, according to law enforcement officials, appears to have been a Pennsylvania State University graduate.

A Go-To Place For Illegal Deals

Ulbricht was incredibly smart when it came to his plan for the Silk Road. Using Bitcoins for the transactions meant the illegal doings were completely untraceable, ensuring that the marketplace's users could not be caught unless someone leaked its user list.

No matter what drug someone was looking for, the Silk Road was able to facilitate deals for cocaine, heroin, ecstasy, marijuana, etc. This activity reportedly resulted in more than $1 billion worth of Bitcoin transactions and millions in profit for the site's owners.

The Silk Road was only active between 2011 and 2013, but during that time, feds say it racked up 1.2 million sales worth $1.2 billion. Out of that money, Ulbricht and whoever else ran the site reportedly received $80 million in commissions.

Not only were drugs a popular buy on the Silk Road, but there were also other transactions for hacking tools. Keyloggers, password crackers, Trojans, and many other pieces of software and malware were being sold on the marketplace.

Ross Ulbricht

Everything came crashing down this morning when Ulbricht was taken to court before being put into a holding facility. Ulbricht worked with a small team to manage and take in profits from the Silk Road. The FBI has stated that the team used a foreign hosting provider to keep the site up and running.

Although there were only a few employees -- based upon our current information -- Ulbricht was not stingy and reportedly paid employees between $1,000 and $2,000 weekly in Bitcoins.

By no means was the Silk Road an incredibly "underground" Web site. According to user reports, it operated like a regular and reputable e-commerce store. Even the little things, like customer support were provided to people using the secret marketplace to buy drugs or whatever else they wanted.

While facilitating the sale of drugs is bad enough from a legal standpoint, Ulbricht may face even more serious charges. Along with running the Web site, the FBI took him down for allegedly conspiring to kill another Silk Road user. Ulbricht is said to have contacted someone through the site and requested that the person kill a user who had supposedly been gearing up to release a list of Silk Road users.

If Ulbricht is found guilty, between the murder-for-hire and drug trafficking charges, it's likely he will be spending quite a long time behind bars.

Read more on: Bitcoin, Hacking, FBI, E-Commerce
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