7:10 am (UTC-7) | by Robert McArdle (Senior Threat Researcher)
The infamous Silk Road marketplace is probably the most well-known place online for anyone wanting to purchase all sorts of illegal goods – ranging from illicit drugs, to firearms and all the way up to hitmen-for-hire.
Yesterday, after two and half years in operation, the site was shut down by the FBI and its owner was arrested. Ross William Ulbricht, the owner and main admin of the marketplace, stands accused of being “Dread Pirate Roberts” and was arrested by the FBI at a public library in San Francisco on October 1, Tuesday.
The complaint filed against Mr. Ulbricht gives details about the marketplace’s operations and accuses him of narcotics trafficking, as well as computer hacking conspiracy and money laundering conspiracy. He is also charged of soliciting the murder-for-hire of another Silk Road user, who threatened to release the identity of the site’s thousands of users.
Figure 1: Silk Road Main Page
Figure 2: Silk Road Main Page after shutdown
The FBI said that it seized approximately $3.6 M worth of Bitcoins. As all bitcoin transactions are public, we can simply observe this transaction in the Bitcoin blockchain. Bitcoin is a highly volatile currency and as such its value dropped in light of this takedown, but it will most likely swiftly recover.
According to the FBI, in the two and a half years of its existence, the site has generated sales totaling over 9.5 million Bitcoins and collected commissions on those sales of over 600,000 Bitcoins. At the time the complaint was filed, this equated to approximately $1.2 billion dollars in sales and $80 million dollars in commissions.
Part of the reason for the site’s longevity is that it was hosted as a hidden service on the TOR network. The Onion Router network (TOR) allows for anonymous communications by using a network of volunteer machines who are responsible for routing encrypted requests, so that all traffic is concealed from network surveillance tools. TOR is not only used for criminal and dubious purposes, but is also commonly used by those who wish to have a sense of anonymity online or who live in countries where access to the Internet is restricted.
The timing of this arrest and takedown coincides with a paper that the Trend Micro Forward Looking Research team has been creating investigating such Deep Web marketplaces. As such, we have released our paper – Deepweb and Cybercrime: It’s Not All About TOR – a little earlier than we had initially planned. We will release a blog post highlighting our findings at a later time.
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