Earlier this year, we reported on the arrest of Silk Road founder Ross Ulbricht, who was nabbed in a public library in the Mission, a few blocks from BMHQ. We wondered if Burning Man’s “Caravansary” theme was an attempt to cash in on all the Silk Road publicity. They do like to be on trend, after all. It’s certainly something that resonates with their customers more than camels: our recent poll showed 91% of Burners have done illicit drugs at the event.

Now, “Silk Road 2″, one of many popular online drug bazaars that sprung up immediately afterwards, has also been shut down. A combined operation led to the arrest  in San Francisco of Blake Benthall aka Defcon. The 26-year old Radiohead fan left his job working for Billionaire Burner Elon Musk’s SpaceX to run a website processing $8 million/month of drug sales.

According to this Reddit thread, the task force was much bigger:

Mr. Bharara praised the outstanding joint efforts of the FBI and its New York Cyber Branch and HSI and its Cyber Crimes Center and Chicago-O’Hare Field Office. He also thanked the Drug Enforcement Administration’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the Internal Revenue Service, the New York City Police Department, HSI, the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, Office of Foreign Assets Control, and New York Department of Taxation. Mr. Bharara also thanked the Department of Justice’s Computer Crime and Intellectual Property Section for its assistance and support, the Department of Justice’s Criminal Division Office of International Affairs, and the law enforcement authorities of France, Germany, Lithuania, the Netherlands, and the United Kingdom.

He wasn’t exactly a master criminal, using the email address “blake@benthall.net”, bragging about being “the biggest market on Darknet”, and re-tweeting about the Princess Bride (where the name Dread Pirate Roberts used by Silk Road’s mastermind came from):

That’s Dread Pirate Benthall on the left. Image: Facebook

From Ars Technica:

It only took about one month from the time the Silk Road drug-dealing website was busted for a successor to be created. The new site, like the old, was on the “Darknet,” only accessible via an anonymizing Tor browser. It called itself “Silk Road 2.0″ and kept the appearance of the old site, down to the green nomad-and-camel logo. Its creator named himself Dread Pirate Roberts, after the first site’s admin.

It’s said imitation is the sincerest form of flattery, and the second Silk Road was certainly flattering to the first. “It is with great joy that I announce the next chapter of our journey,” announced the new Dread Pirate Roberts last November, writing on a Tor-only forum about the black market. “Silk Road has risen from the ashes, and is now ready and waiting for you all to return home.”

He added that he had “taken steps the previous Dread Pirate Roberts wouldn’t have even thought of.”

Whatever those steps were, it wasn’t enough to protect the site from old-fashioned human infiltration…Within several weeks, an undercover agent from Homeland Security Investigations (HSI) wasn’t just perusing goods on the new site—the agent was on staff, with access to special discussion forums and technical data.

…Over the next several months, the site would do millions of dollars of sales in narcotics and other illegal items, like fake passports and drivers’ licenses. Silk Road 2.0 made its money through a 5 percent commission on each purchase.

“We are the most major market on the darknet site at this point,” Defcon wrote on January 5. With that came security responsibilities. In a seller-only section of the SR2 forum, he wrote:

We are in a position to teach an incredibly valuable life skill for this buyer community: Always encrypt… we are doing this more for buyers’ sake than vendors’ sake. PGP encryption teaches users to never enter their address on ANY darknet site, which greatly decreases LE’s ability to set up honeypots.

…Linking the server to Blake Benthall wasn’t exactly rocket science. “The server was controlled and maintained during the relevant time by an individual using the email account ‘blake@benthall.net,'” wrote Vincent D’Agostino, the FBI agent who signed the complaint…after just one month, the site had generated about $8 million in sales and $400,000 in commissions…

When Agent D’Agostino accessed Silk Road 2.0 last week, he found 14,024 listings under “Drugs,” including 1,654 listings for psychedelics, 1,921 listings for ecstasy, 1,816 listings for cannabis, and 360 listings for opioids…5 grams of “Highest Purity Cocaine — Direct From Colombia,” on sale for $488 in bitcoins. One hundred grams of “Afghan Heroin Brown Powder” was on sale for $4,555 in bitcoins. A fake Danish passport would run a buyer $2,414, while a fake New Jersey Driver’s license, including holograms, would be a comparatively cheap $98… a 4-7 day effort “to HACK the website you want,” for $624. A method of hacking Gmail accounts was offered for $42

…he had a five-month stint working at SpaceX, Elon Musk’s private space flight startup, which lasted until March of this year…“Facing a ‘now what’ moment at the end of StartupBus,” wrote Benthall on Facebook on March 8

 

Read the full story at Ars Technica.

One of his last tweets before the arrest now seems tragically ironic:

IM BORED.

— blake (@blakeb) November 6, 2014

 

Engadget reports that it wasn’t just Silk Road 2.0 that was shut down – their penetration of the “supposedly secure” TOR network has led to 17 arrests and the shutdown of 410 online drug marketplaces. Now they’re going after the customers…

From Engadget:

Yesterday’s takeover of Silk Road 2.0 was just the tip of the iceberg apparently, as the FBI and European law enforcement organizations have announced a “global action” against similar darknet marketplaces. “Operation Onymous” resulted in 17 arrests total, the removal of 410 hidden services that allegedly offered illegal drugs and weapons for sale, as well as the seizure of more than $1 million Bitcoins in, $250,000 in cash and drugs. Troels Oerting of the European Cybercrime Center told Wired that his staff hadn’t had time to assemble a full list of takedowns, but it includes Cloud 9, Hydra, Pandora, Cannabis Road and more. The Telegraph reports six Britons accused of helping run Silk Road 2.0 are among those arrested, while the BBC has word of two arrested in Ireland. Like both iterations of Silk Road, the sites were using Tor to anonymize access, but were still exposed. Details of how the service was pierced have not been revealed (we have an idea), but The Wall Street Journal quotes Eurojust spokesman Ulf Bergstrom saying “You’re not anonymous anymore when you’re using Tor.”…

So what’s next? This round of arrests focused on those running the marketplaces, occurring in Bulgaria, the Czech Republic, Finland, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, the Netherlands, Romania, Spain, Sweden, Switzerland, the United Kingdom and the USA. According to Oerting, the next step is to go after others, including those who purchased illegal goods from the marketplaces

The Washington Post says that the DarkNet makes the world a safer place – by making the quality of drugs better. The recent arrests only took out a third of it.

there’s a strong argument to be made that the darknet economy makes the world a safer place overall. By taking drug transactions off the street and putting them online, you eliminate a significant link in the chain of violence between drug suppliers and end users. Drugs purchased online are typically less adulterated with dangerous contaminants than street drugs are, and a system of reviews rewards sellers who provide high-quality product.

image: Darryl Lau

image: Washington Post/Wonkblog

There’s already a Silk Road 3 – use it at your own risk, it’s not like the authorities will be watching or anything…

This video shows the range of merchandise that was on offer in this “Amazon of drugs”