Silk Road ends: Feds arrest 'Dread Pirate Roberts,' alleged founder of largest Bitcoin drug market


#1

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#2

.. aaand he escapes into the Fire Swamp!


#3

How do they seize Bit Coins?
Do they go "Uhh, it's here on this computer?"


#4

" a routine border search intercepted a package containing 9 fake IDs, which had been shipped from Canada to a San Francisco address."

Wow, talk about a lucky break! And I bet they were surprised when they "stumbled" on that server. Lucky, lucky, lucky.


#5

Lucrative as SR was for a lot of folks, I can't see the ol' Hydra taking long to pop out a new head. There were already several competitors, were there not?


#6

Yes, but a couple of things:

  • The government has the wallet, which means they have the complete transactional history
  • The government also has street addresses/shipping addresses, cause DPR saved them
  • The government also has the entire block chain of bitcoin, so they know every transaction. EVER.
  • The indictment was just unsealed, which means they likely already have numerous people in custody
  • Questionable things about TOR are also in play here.

All that combined with the fact that if the indictment is true, MOST of bitcoins usage EVER was on Silk Road, (Remember, the USD3.6 million seized was the commission..) So, bitcoin WILL crash. Any future "Silk Roads" that pop up will likely have disinfo campaigns against them by federal agents. Nobody's going to be able to trust this particular method again.


#7

True. Glad I never used it. Wonder if they're going to share that info with other LEA's worldwide? and what those agencies will do with the info...


#8

The indictment was unsealed.. heh. .they probably already have shared it far and wide with other LEAs


#9

Yep, bitcoin crash is in progress. -18% to -37 on different exchanges. (Not too unusual for bitcoin, though.)


#10

Part of me is thinking, "Geezus, that murder-for-hire thing is disturbing to read. Even after five seasons of Breaking Bad. What a horrible person."

Part of me is thinking, "Geezus, the Dread Pirate Roberts is shitty at haggling."


#11

Perhaps not just disinfo campaigns... having a honeytrap become the leading online "anonymous" marketplace would be invaluable to The Authorities. Though to keep it going, one would face the "Coventry conundrum."


#12

He went full Heisenberg.

Never go full Heisenberg.


#13

Whoever has the private key for a bitcoin account (in addition to the address) is able to transfer funds from it. If they seized his bitcoins, I assume they took the keys and moved his funds into an/other account(s) they control.


#14

"This Hidden Site Has Been Seized"

Is that...Gibsonian? Stephensonian? Or...wellian?


#15

Digging through some of the doc — interesting bits:

based on forensic analysis of the Silk Road Web Server, I know that
the server includes computer code that was once used to restrict
administrative access to the server, so that only a user logging into
the server from a particular IP address, specified in the code, could
access it. Based on my training and experience, and my familiarity
with how server access is commonly configured, I believe this IP
address was for a virtual private network server Server") --
essentially a secure gateway through which DPR could remotely login to
the Silk Road Web Server from his own computer. The IP address for the
VPN Server resolves to a server hosted by a certain server--hosting
company, from which I have subpoenaed

2'7

records concerning the VPN Server. The records show that the contents
of the VPN Server were erased by the customer leasing it.4 However,
the records reflect the IP address the customer used to access the VPN
Server during the last login to the server, which was on June 3, 2013.
This IP address is a Comcast address that, according to records
subpoenaed from Comcast, resolves to an Internet cafe on Laguna Street
in San Francisco, California. This cafe is located less than 500 feet
away from the Friend's address on Hickory Street regularly used by
Ulbricht to log in to the Ulbricht Gmail Account -- including at
various times on June 3, 2013, according to Google records.

So the feds apparently seized the actual Silk Road server and gained complete access.

The investigation has also uncovered evidence that, by
July 2013, Ulbricht had moved to a different San Francisco
address, where he was shipped a package containing multiple
counterfeit identification documents, at the same time that DPR
is known to have been seeking such documents on Silk Road.

Completely foolish move to use the admin account to discuss and or place orders to his physical address and:

The agents showed ULBRICHT a photo of one of
the seized counterfeit identity documents, which was a
California driver's license bearing ULBRICHT's photo and true
date of birth, but bearing a name other than his. ULBRICHT
generally refused to answer any questions pertaining to the
purchase of this or other counterfeit identity documentsi
However, ULBRICHT volunteered that "hypothetically" anyone could
go onto a website named "Silk Road" on "Tor" and purchase any
drugs or fake identity documents the person wanted.

Another dumb move to volunteer that knowledge

On March 5, 2012, a user established an
account on Stack Overflow with the username "Ross Ulbricht."
Ulbricht provided the Ulbricht Gmail Account as his emmail
address as part of his registration information...

Less than one minute after posting the message
described in the previous paragraph, Ulbricht changed his
username at Stack Overflow from "Ross Ulbricht" to "frosty"...

iv. Several weeks later, Ulbricht changed his
registration e--mail on file with Stack Overflow as well, from
the Ulbricht Gmail Account to "frosty@frosty.com." According to
centralops.net, a publicly available e--mail address lookup
service, "frosty@frosty com" is not a valid e--mail address.

Plus

I have examined the SSH public
key stored on the Silk Road Web Server that is used to
authenticate administrative logins to the server. The key ends
with the substring "frosty@frosty." Based on my training and
experience, this means that the administrator of Silk Road has a
computer named "frosty," on which he maintains a user account
also named "frosty," which he uses to log in to the Silk Road
Web Server.

OOF.

Sounds like a lot of amateur mistakes... but there's not exactly anything that sounds like it proves it beyond a reasonable doubt... anyone can be "frosty" or access a public network outside of his apartment — for his sake he better hope his personal devices are encrypted.

Personally, If I were running something like this I wouldn't access anything linking me to the site without first leaving my phone at home and paying a cab with cash to drive me a few towns over to use TOR on a clean-boot CD via a public access point. I'd also probably find an obscure acre of desert somewhere and bury a paper wallet. Inconvenience is nothing compared to decades of jail time.

Taking in that much money and facilitating drug sales without extraordinary caution is absolutely insane — if he's convicted his life is essentially over.

Silk Road will likely carry on... the internet Hydra doesn't really stop once a certain floodgate has been opened.


#16

Wrong. The genies out of the bottle. I give it a week or two until there is a universally agreed upon replacement for Silk Road and it's business as usual.

The feds will never win this fight.


#17

Those killings were most likely scheduled for the morning.


#18

The two alleged hits are interesting. The supposed 'clean hit for $80K' could be complete bullshit, just something that DPR threw out there to negotiate on price. But the other murder, where someone apparently provided photographic evidence... just because the Canadian police say they 'have no evidence that any such homicide occurred in White Rock, British Columbia on or about March 31, 2013.', that's not all that reassuring. Do they know the name of the purported victim? I suppose they might be playing dumb while they try to track down the killer...


#19

Or the hitman and the blackmailer are the same person and they were running a confidence game.


#20

I'll put that right there next to "The feds will NEVER catch Silk Road." And "Bitcoin is anonymous"