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Silk Road 2.0 Seized By FBI, Alleged Founder Arrested In San Francisco

blottsie writes The FBI has arrested the online persona "Defcon," identified as Blake Benthall, a 26-year-old in San Francisco, who the agency claims ran the massive online black market Silk Road 2.0. Benthall's FBI arrest comes a year after that of Ross Ulbricht, also from San Francisco, who's the alleged mastermind of the original Silk Road and still awaiting trial. The largest of those reported down is Silk Road 2.0. But a host of smaller markets also seized by law enforcement include Appaca, BlueSky, Cloud9, Hydra, Onionshop, Pandora, and TheHub. Also at Ars Technica.

22 of 219 comments (clear)

  1. Another Idiot Tempts the Fates by Anonymous Coward · · Score: 5, Insightful

    Really, a second fool resides in the US while running an illegal operation? Go ahead, wave a red cape at the bull, but don't cry when it gores you.

    1. Re:Another Idiot Tempts the Fates by Anonymous Coward · · Score: 5, Interesting

      And there will be a third and forth and fifth... It will NEVER stop. There is absolutely nothing the government can do to stop it. Nothing. There is 8 million a month spent on something relatively complicated to use (compared to say Amazon) and carries a risk of jail time. Think about that. Obviously there's a demand and that demand will be met no matter the cost. But it's not like there are more important things to spend the time and money on.

    2. Re:Another Idiot Tempts the Fates by mrchaotica · · Score: 5, Interesting

      I think the previous AC's point was not that it would eventually stop, but rather that eventually someone would come along who was smart enough to run his criminal empire from somewhere outside the US. Then we'd get a story about the CIA, instead of merely the FBI.

      --

      "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

    3. Re:Another Idiot Tempts the Fates by ArhcAngel · · Score: 4, Insightful

      CIA? Naw they'll just grease the wheels of the local politicians to arrest that guy and deport him without due process. At least that's the way Kim Dotcom tells it.

      --
      "A person is smart. People are dumb, panicky dangerous animals and you know it." - K
    4. Re:Another Idiot Tempts the Fates by lgw · · Score: 5, Insightful

      ... It will NEVER stop.

      ... until the primary products sold there are legalized. Several more states legalized pot this month. I expect it will be sold on Amazon in my lifetime. That will certainly be the end for a black market for that particular good. How much of Silk Road's market (in terms of money actually spent) is for similarly innocuous stuff? For all the hype, I doubt the assassination market is real. There are of course some drugs that will never be legal - anyone know if that's a big business?

      The business for botnets is probably with us forever, but amazingly the price of cloud servers is coming down low enough where it won't make much sense to use a botnet except directly for criminal activities (DDOS etc).

      --
      Socialism: a lie told by totalitarians and believed by fools.
  2. Not smart by Ralph+Wiggam · · Score: 4, Insightful

    Who is still using these sites after all of the Silk Road 1.0 arrests? You have to be pretty dumb to risk your freedom on some stranger's computer security skills.

    1. Re:Not smart by Kjella · · Score: 4, Insightful

      What arrests? From what I gathered last time I looked into it, people advertised drugs with their public PGP key. The actual transaction with payment and shipping address happened encrypted between the seller and the buyer, they got Slik Road 1.0 the site but not anything like a customer registry or order history. Of course there's the risk of dealing with the individual dealer but hey, it's not exactly like that's risk free in the real world either. From what I gather it was pretty much like closing down a torrent site, everybody just moves to another site and carry on like before. Now who'd operate an online drug sales portal that's a good question, you're getting waaay too much exposure compared to the rewards. But that's for the 0,1% who runs the site, not the 99,99% that use them.

      --
      Live today, because you never know what tomorrow brings
    2. Re:Not smart by Ralph+Wiggam · · Score: 4, Informative

      they got Slik Road 1.0 the site but not anything like a customer registry or order history.

      That's not true. The FBI had full admin access to Silk Road 1.0 for several months before they shut it down. People around the world were arrested.

      Most of the Google results are this new 2.0 arrest. Here are some articles about sellers from SR1.0 getting arrested.

      http://www.law360.com/articles/479177/8-more-silk-road-arrests-reported-in-us-europe
      http://www.nbcnews.com/tech/internet/silk-road-merchant-arrested-over-sale-drugs-guns-cash-n35691
      http://articles.baltimoresun.com/2014-09-05/news/bs-md-silk-road-sentencing-20140905_1_dread-pirate-roberts-ross-william-ulbricht-jacob-theodore-george-iv

      There's another reason why selling drugs online is a bad idea. After SR1.0 got shut down, there were a bunch of forum posts from people who had been fronted large amounts of drugs to sell online. The drugs had been sent out, and then the resulting bitcoins got seized by the Feds. Now they owed very unpleasant people huge amounts of money that they didn't have.

    3. Re:Not smart by NoImNotNineVolt · · Score: 3, Interesting

      After SR1.0 got shut down, there were a bunch of forum posts from people who had been fronted large amounts of drugs to sell online. The drugs had been sent out, and then the resulting bitcoins got seized by the Feds. Now they owed very unpleasant people huge amounts of money that they didn't have.

      Whether in the drug market or the stock market, trading on margin has its risks.

      --
      Chuuch. Preach. Tabernacle.
    4. Re:Not smart by Kjella · · Score: 3, Informative

      Of your three articles, the first is behind a pay wall. The second explicitly says they caught the package in the mail and worked from there. The third happened before the Silk Road bust and they said they used information in that case against Silk Road, not the other way around. Nothing really supports that the bust itself was used to round up sellers or buyers in large numbers.

      --
      Live today, because you never know what tomorrow brings
  3. Money trail by phantomfive · · Score: 3, Interesting

    If money is being transferred electronically, it can be traced back to you. That's the weakness of all illegal online marketplaces.

    --
    "First they came for the slanderers and i said nothing."
    1. Re:Money trail by phantomfive · · Score: 4, Informative

      You need a form of currency that cannot be tracked that is accepted by the receiving party. Bitcoins are one kind of currency that fulfills that requirement

      Bitcoin is absolutely not anonymous. It's more anonymous than a direct bank-to-bank transfer, but every transaction is recorded publicly.

      --
      "First they came for the slanderers and i said nothing."
  4. Re:DON'T ABUSE TECHNOLOGY!!! by Anonymous Coward · · Score: 3, Interesting

    Don't abuse the people. Clearly a large number of people want this service no matter the risk. There will be plenty of others ready to fill the void.

  5. Re:I have said it before... by TechyImmigrant · · Score: 3, Informative

    >1. Tor is not as secure as everybody says it is (because _____ insert your favourite conspiracy theory/security failure here).

    It is. We know it is from the Ross Ulbricht case. They posed as a vendors and customers and sent malware to the browsers at the other end. Tor might be fine as an intermediate, but the endpoints are leaky as hell if you don't act with great caution.

      >2. NSA/GCHQ, etc... justification for snooping on everyone (terrorists! drugs! guns!) is just complete and utter bull****. Hard detective work pays every time, and is probably more cost-effective than the massive surveillance and privacy violations we have right now.

    We know it is. Parallel construction is well documented.

    --
    I should use this sig to advertise my book ISBN-13 : 978-1501515132.
  6. Re:The war on drugs by Chris+Mattern · · Score: 3, Funny

    Perhaps we should nuke SF and finally win the WoD.

    You can't win the WoD--the Jyhad is eternal.

  7. Re:DON'T ABUSE TECHNOLOGY!!! by Opportunist · · Score: 5, Interesting

    You act as if that law was a natural one, imposed by nature itself. Which are by definition also the only laws you can neither break nor change.

    Just because something is the law doesn't make it automatically right. Human laws don't define what is right. Only what is legal.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  8. Re:Do they think they won't get caught? by Hussman32 · · Score: 4, Funny

    Heh, people tell me all the time that I have 'delusions of grandeur,' but they are a bunch of nobodies and who cares what they think.

    --
    "Who are you?" "No one of consequence." "I must know." "Get used to disappointment."
  9. Just the beginning by troll+-1 · · Score: 3, Interesting

    These free trade sites will keep popping up as fast as they are shutdown. The government's position that unrestricted trade is dangerous is untenable.

  10. Re:DON'T ABUSE TECHNOLOGY!!! by ShanghaiBill · · Score: 4, Insightful

    This is the reason why we can't have anything nice. Is because their are too many jerks out there who will use a new technology as a way to do illegal activities!

    How is Silk Road infringing on your ability to do anything? 90% of the activity on Silk Road are private transactions between consenting adults for things that should have never been illegal in the first place. The way to have less crime, is to criminalize fewer things.

  11. Re:Gentlemen, start your engines! by jittles · · Score: 5, Interesting

    It's completely possible.

    Ulbricht was not very smart. He bought fake IDs off his own website and had them shipped to his actual home address. The IDs were intercepted in the mail. and this clued the FBI in on his activities. Then he managed his servers using a direct VPN connection. Once the FBI traced the VPN endpoint he was done. They coerced the hosting company to allow them access and they could collect all the information they needed to build a case from that point on.

    I imagine this Defcon guy did something similarly dumb.

    To do this right:

    1. Find a VM hosting company offshore that accepts bitcoins and doesn't ask for identity. 2. Buy some bitcoins, use one of the many tumbler services to wash them, and pay for the services that way 3. Never manage or otherwise connect to your VM directly. Always use TOR. SSH works great over TOR. 4. Don't buy shit off your own website and have it shipped to your damn house.

    Just finished reading the affidavit from the FBI. This guy was a dumbass. He used a gmail account to pay for the VPS service and used his home internet connection to connect to the gmail account. He used his own, hotel, and relatives internet connections to connect to the hosting provider without any sort of anonymizing service. The FBI used either an undercover agent or a confidential informant to eventually find the VPS provider. From there, he was quite easy to track. The FBI had been watching the guy for months. The affidavit suggested it was an undercover agent that was hired as a staff member on the website that lead to this case being cracked open.

  12. Re:Silk Road 3.0... by kromozone · · Score: 5, Insightful

    MDMA is relatively benign and no one is overdosing on it. What you do increasingly see is people overdosing on what they think is MDMA because it's not as readily available now thanks to law enforcement.

    http://www.theguardian.com/pol...

  13. Re:DON'T ABUSE TECHNOLOGY!!! by fnj · · Score: 4, Insightful

    A complete lack of victims other than self does bloody goddam well make it not wrong, however.