Breaking: Silk Road Shut Down. "Dread Pirate Roberts" in Custody

[amy31416]

https://medium.com/p/d48995e8eb5a

No doubt the guy was a fuck-up.

And why the hell would he stay in the US? Dumbass.

 

[mczerone]

(A) It looks like this is really DPR.

(B) The whole hitman story sounds fishy - they give the city and time for the apparent "proved" hit, but the town doesn't have any record of homicides. I wonder if the hit-ee made a sock puppet and took the money paid to the hitter? And it doesn't sound like something DPR would resort to, but in the black market, there's no legitimate recourse, so things happen...

 

[AuH20]

No doubt the guy was a fuck-up.

And why the hell would he stay in the US? Dumbass.

What's ironic is that he is not the original creator of the famed Silk Road nor the original Dread Pirate Roberts. Ulbricht was an associate of the original founder that had fixed a security flaw in the transaction software and then decided to buy the original DPR out, in the process taking over his venture & persona. The original DPR had gotten out.

 

[amy31416]

What's ironic is that he is not the original creator of the famed Silk Road nor the original Dread Pirate Roberts. Ulbricht was an associate of the original founder that fixed a security flaw in the transaction software and then decided to buy the original DPR out, in the process taking over his venture & persona. The original DPR got out.

Allegedly. Apparently some think that he's really the original DPR who pulled the buyout stunt to protect himself.

 

[dannno]

This seems to be the most interesting part. How did he get their identities and who else has them?

What sucks is Silk Road guy was a victim of extortion - the main reason users want their identity kept private is that they are engaged in the black market, so of course they want it kept private - otherwise they would get unwarranted violence directed at them from the state - and Silk Road couldn't go to the authorities to remedy the situation because they are running the black market...so what other choice did authorities give him than to kill him? He was basically defending himself and every other user on Silk Road from unwarranted violence from government.

It's sort of like Breaking Bad.. The only reason Walt had to engage in what would normally be considered immoral behavior was because he was involved in black market activity.. but put in the situations that he was in, it could easily be argued that he was doing something like killing Gale in self defense.

 

[amy31416]

What's ironic is that he is not the original creator of the famed Silk Road nor the original Dread Pirate Roberts. Ulbricht was an associate of the original founder that fixed a security flaw in the transaction software and then decided to buy the original DPR out, in the process taking over his venture & persona. The original DPR got out.

Allegedly. Apparently some think that he's really the original DPR who pulled the buyout stunt to protect himself.

 

[amy31416]

FBI's Case Against Silk Road Boss Is A Fascinating Read
from the for-you-breaking-bad-junkies dept
It's been known for quite some time that the feds were desperately trying to hunt down the folks behind Silk Road, the somewhat infamous "dark web" e-commerce site, accessible only via Tor, which was famous mainly for selling drugs in a slightly anonymous fashion. Of course, when the news came out recently that the FBI had used malware to reveal Tor Browser users, many believed that this was part of an attempt to track down Silk Road, and that seems increasingly likely after the FBI announced this morning that it has arrested Silk Road's owner, Ross William Ulbricht, who went by the moniker "Dread Pirate Roberts" online. Turns out that Ulbricht was based in San Francisco and was arrested at the public library, of all places.

The case against him (pdf) is interesting, because beyond just going after him for helping to distribute illegal drugs, they claim that he solicited a Silk Road user in a murder-for-hire request (though he's not charged with that), to potentially go after a different Silk Road user who was threatening to reveal the identities of people on the site (the user claimed to have hacked a large vendor's account, and demanded $500,000 to not reveal names). They also go after him (of course) with a CFAA violation claim and a money laundering claim. Of course, we've seen the DOJ inflate and pile on charges against people in the past, so it will be worth watching to see what details come out of this -- but soliciting a murder, if true, seems like a fairly big deal.

In addition, the complaint against him claims that Silk Road generated 9.5 million Bitcoins in revenue, leading to 600,000 Bitcoins in commissions (or roughly $1.2 billion in sales and $79.8 million in commissions). Of course, that seems noticeably higher than previous research had suggested. It also notes that the FBI itself made over 100 purchases on Silk Road -- including ecstasy, cocaine, heroin, LSD and others. Apparently, they wanted a lot of evidence. And, in case you were wondering, the FBI informs us that their orders "have typically shown high purity levels of the drug the item was advertised to be on Silk Road."

While the details in the complaint seem pretty thorough, there are some tidbits that stand out as questionable. The complaint clearly states that Bitcoin and Tor are both legal and have legitimate purposes, but it also says that Silk Road's use of proxies to "hide the identities of those that run Silk Road... reflect his awareness of the illegal nature of the Silk Road enterprise." I don't quite see how wanting to be anonymous automatically suggests that you're engaged in illegal behavior. Later in the complaint, the FBI agent spends an awful lot of time talking about how Ulbricht was interested in the Mises Institute, the well-known libertarian think tank. I'm not sure what that has to do with anything. The FBI notes that Dread Pirate Roberts' defense of Silk Road included quoting Ludwig von Mises and Murray Rothbard (two economists closely associated with the Mises Institute), but lots of people follow the Mises Institute, so that seems like a stretch.

Another questionable tidbit: the FBI notes that Ulbricht posted a question to Stack Overflow using his real name, but "less than one minute later, Ulbricht changed his username at Stack Overflow from 'Ross Ulbricht' to 'frosty.'" and then the FBI agent noted "I know that criminals seeking to hide their identity online will often use pseudononymous usernames to conceal their identity." Later, after Ulbricht changes the email on the account to [email protected] -- an invalid email address -- the FBI agent similarly notes that "criminals seeking to hide their identity online will often use fictitious e-mail addresses." Well, yes, but the same is true of people with perfectly legitimate reasons to be anonymous, or those who don't want spam. While there does appear to be plenty of actual evidence, the use of these tidbits seems highly questionable.

The whole extortion/murder for hire story is a bit crazy. As noted above, one user contacted Dread Pirate Roberts, claiming to have hacked another vendor and obtained the details of users, which he'd release if not given $500,000 to pay off another drug supplier. Ulbricht asked the guy who was threatening him, a user who went by the name FriendlyChemist, to put him in touch with that supplier. After FriendlyChemist did so, Ulbricht used the opportunity to try to get that supplier to sell drugs via Silk Road. There was a further discussion, and when FriendlyChemist started getting anxious, the complaint says Ulbricht asked FriendlyChemist's supplier how much "would be an adequate amount" in order to "put a bounty on his head." After being quoted a price of $150,000 to $300,000 (rate dependent on "clean" or "not clean") Ulbricht allegedly complained that the price was high, and noted that he'd previously hired someone to kill someone for $80,000. They eventually agreed to a price of $150,000 (16710 Bitcoins), and Ulbricht was told that the job was done: "Your problem has been taken care of. . . . Rest easy though, because he won't be blackmailing anyone again. Ever." Apparently a photo was supplied. The FBI notes that while this supposedly happened in Canada, Canadian law enforcement says that it didn't happen.

The complaint also notes that Ulbricht has a LinkedIn page which includes a bit of a rant about "using economic theory as a means to abolish the use of coercion and aggression amongst mankind." It also notes "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." Not sure how one squares that with trying to hire someone to commit murder, but we'll let others debate that.

It appears that while Ulbricht was mostly careful to cover his tracks, he wasn't always that careful. The complaint notes that Silk Road was first advertised on different forums by a user named "altoid," in a manner that indicated altoid was connected with the site. Months later, altoid also posted elsewhere that he was looking to hire an "IT pro in the Bitcoin community" for "a venture backed Bitcoin startup company" -- but then told interested people to contact him at his actual gmail address: [email protected]. And, voila, the FBI had a name. Also, later, when Homeland Security officials intercepted a package that contained a bunch of fake IDs for Ulbricht, they showed up at his home in July. While he generally refused to answer questions, he did tell them that "'hypothetically' anyone could go onto a website named 'Silk Road' on 'Tor' and purchase any drugs or fake identity documents...." There was also the above mentioned Stack Overflow account, which (briefly) used his real name and email address, which indicated that he was working on a Tor hidden service, and posted some code that (in a modified form) was also found on Silk Road.

All in all, there does seem to be a fairly compelling case built against Ulbricht based on this (though, again, we've seen in previous DOJ cases where things aren't always as they seem). At a first glance, they have a lot of evidence on him. However, some questions do remain. At the beginning of the post, we mentioned the whole thing where the FBI was using malware to identify Tor users... but, of course, that doesn't show up anywhere in the complaint. Instead, the big "breakthrough" was when a "random border search" by DHS turned up those fake identities intended for Ulbricht. However, as Parker Higgins notes, it seems like this could be a case of "parallel construction" whereby the hacking revealed those details, and DHS was then tipped off to check packages sent to Ulbricht, seeking to create "parallel construction" of evidence, in order to launder the fact that the FBI had hacked its way into identifying Tor users. After all, we'd just reported on how the FBI was actively trying to avoid revealing its hacking/malware powers to technologically sophisticated individuals.

Either way, we're sure that there will be plenty more news on this case.

http://www.techdirt.com/articles/20...inst-silk-road-boss-is-fascinating-read.shtml

 

[VanBummel]

Plot twist: Government owned Silk Road, it's offline due to the shutdown.

 

[dannno]

they claim that he solicited a Silk Road user in a murder-for-hire request (though he's not charged with that), to potentially go after a different Silk Road user who was threatening to reveal the identities of people on the site (the user claimed to have hacked a large vendor's account, and demanded $500,000 to not reveal names).

Ya it sounds like the hit was completely morally justifiable.

The guy who was threatening to send out the user identities was going to bring down unwarranted violence from the government against SR and potentially many of the users of the SR, so in order to protect them he would have to kill this guy who was committing extortion against him because he cannot go to the authorities with this matter.

They should really be going after the guy who hacked the account and was trying to extort him, but guess what? That guy was probably a Fed who was merely going to trace him down after the payment was made.

 

[Occam's Banana]

What's ironic is that he is not the original creator of the famed Silk Road nor the original Dread Pirate Roberts. Ulbricht was an associate of the original founder that had fixed a security flaw in the transaction software and then decided to buy the original DPR out, in the process taking over his venture & persona. The original DPR had gotten out.

For someone sporting the moniker "Dread Pirate Roberts," that is not ironic - in fact, it is entirely fitting and appropriate.

 

[Occam's Banana]

[...] Later in the complaint, the FBI agent spends an awful lot of time talking about how Ulbricht was interested in the Mises Institute, the well-known libertarian think tank. I'm not sure what that has to do with anything. The FBI notes that Dread Pirate Roberts' defense of Silk Road included quoting Ludwig von Mises and Murray Rothbard (two economists closely associated with the Mises Institute), but lots of people follow the Mises Institute, so that seems like a stretch.

Another questionable tidbit: the FBI notes that Ulbricht posted a question to Stack Overflow using his real name, but "less than one minute later, Ulbricht changed his username at Stack Overflow from 'Ross Ulbricht' to 'frosty.'" and then the FBI agent noted "I know that criminals seeking to hide their identity online will often use pseudononymous usernames to conceal their identity." Later, after Ulbricht changes the email on the account to [email protected] -- an invalid email address -- the FBI agent similarly notes that "criminals seeking to hide their identity online will often use fictitious e-mail addresses." [...]

I have done every one of these things (some of them more than once).

Showing interest in the Mises Institute - check.
Quoting Ludwig von Mises - check.
Quoting Murray Rothbard - check.
Changing a username at a website - check.
Using a pseudonym as a username - check.
Using a non-existent email address - check.

Watch out, yo! I'm OG ...

 

[angelatc]

I have done every one of these things (some of them more than once).

Showing interest in the Mises Institute - check.
Quoting Ludwig von Mises - check.
Quoting Murray Rothbard - check.
Changing a username at a website - check.
Using a pseudonym as a username - check.
Using a non-existent email address - check.

Watch out, yo! I'm OG ...

Earlier this year, authorities in South Carolina arrested Eric Daniel Hughes, known on Silk Road as “Casey Jones,” and charged him in state court with drug possession. The Drug Enforcement Agency seized units of bitcoin, which Hughes allegedly used to purchase drugs from the online market.

http://freebeacon.com/fbi-shuts-down-illegal-drug-and-murder-for-hire-website/

 

[devil21]

I don't know much about bitcoin so pardon if this is a stupid question. How can the feds seize bitcoins?

 

[fisharmor]

I had no idea Princess Bride had pirates in it . Any kids animation is better if you throw in some pirates ,indians , monkeys etc . I watched Peter Pan a couple weeks ago.

Animation?
"You keep using dah whord. I doo no think ih means wha you think ih means."

If you haven't seen The Princess Bride - the live action movie directed by Rob Reiner and starring Robin Wright, Cary Elwes, Mandy Patinkin, Andre the Giant, and a host of others... then you need to get it and watch it. It contains the single most badass swordfight ever committed to film.

processed transactions worth over a total of 9.5 million Bitcoins, which adds up to roughly $1.2 billion in sales.

Is anyone else surprised that they let that go to print????

 

[dannno]

//

 

[dannno]

I don't know much about bitcoin so pardon if this is a stupid question. How can the feds seize bitcoins?

They would have to create a wallet somewhere just like anybody else and transfer the coins to their wallet from the wallet of the person who owned them, which would require access to the original account/wallet.

They can keep the coins on a wallet on an exchange or something or they can keep them on a wallet that they install on their computer.

 

[devil21]

Thanks for explanation. I thought the security of bitcoins was one of the touted benefits, being that it's not "centralized" like fiat bank accounts. When cops seize bank accounts they send court orders to the banks and the accounts are frozen, etc. Sounds kinda like the cops/gov't can jack anyone's bitcoins without any court process as long as they can get to the person's wallet.

 

[evilfunnystuff]

Thanks for explanation. I thought the security of bitcoins was one of the touted benefits, being that it's not "centralized" like fiat bank accounts. When cops seize bank accounts they send court orders to the banks and the accounts are frozen, etc. Sounds kinda like the cops/gov't can jack anyone's bitcoins without any court process as long as they can get to the person's wallet.

It is the users responsibility to keep the wallet as physically and intellectually secure as they deem necessary .

Physical as in no one can get their hands on it, can be done through hiding or memorization.

Intellectually as in keeping it encrypted, some folks split the wallet into a few different files in addition to encryption and keep those files in different physical locations.

Also keeping backups are important due to disasters, media degradation, etc.


With liberty comes responsibility.

 

[TomKat]

So I guess the $3.5m question is, Who will create the next Silk Road?

 

[dannno]

So I guess the $3.5m question is, Who will create the next Silk Road?

I don't know. But whoever it is will very likely be better at it. I can't wait.