Feds Bust Silk Road 2.0—the New and Improved Cybercrime Website

Friday, November 07, 2014
Blake Benthall (photo: Github.com profile picture)

A 26-year-old San Francisco computer programmer was arrested this week by federal agents and accused of resurrecting the infamous Silk Road website that allowed people to anonymously traffic in illicit drugs and forged documents while availing themselves of suspect services.

Blake Benthall, aka Defcon, was charged with conspiracy to commit narcotics trafficking, computer hacking and money laundering. His arrest comes about a year after the authorities hauled in San Francisco resident Ross William Ulbricht, aka Dread Pirate Roberts, on similar charges.

Benthall allegedly started his site, dubbed Silk Road 2.0, just weeks after Ulbricht was busted. The criminal complaint cited a series of messages from Defcon to Silk 1.0 users that he had picked up the mantle from “our Captain” and was maintaining the website’s services.

Both sites operated alleged criminal marketplaces using the Tor network, free software that hides a user’s identity and physical location by bouncing multi-layered encrypted communications through a distributed network of relays operated by volunteers around the world.

Participants download the Tor browser, the only browser that can access the network. It is widely used by those seeking to cloak their activities from prying eyes, and is a favorite among media, activists, businesses, the military and plain folk looking to maintain their cover as just plain folk.    

The criminal complaint, filed in New York, where the investigation was initially conducted, said Silk Road 2.0 generated $8 million in sales and $400,000 in commissions monthly. Transactions were conducted in bitcoins, decentralized electronic currency that is legal but a favorite of cybercriminals who love its uncontrollable anonymity.

Users would legally purchase bitcoins and transfer them to their Silk 2.0 accounts. They could make purchases from numerous vendors, while paying a commission to the site operator. An FBI agent wrote in the criminal complaint about a single day he spent at the website last October. “I observed that the Silk Road 2.0 marketplace was dominated by offerings for illegal narcotics, with 14,024 different listings offering the sale of ‘Drugs,’ including, among others, 1,654 listings for ‘Psychedelics,’ 1,921 listings for ‘Ecstasy,’ 1,816 listings for ‘Cannabis,’ and 360 listings for ‘Opioids.’ “

In addition to drugs, the agent noted fake Danish passports for sale, along with fake New Jersey driver’s licenses, website hacking services and e-mail hacking.  

The Silk Road is not the only illegal marketplace operating on the web. The complaint notes a memo from Defcon to his staff that they should monitor other black market sites for possible vendors and customers, and detailed the drug operations of two of them.

A cursory reading of the criminal complaint reveals a dangerous environment filled with scurrilous characters—a place not even safe for the Silk Road operator. Two months ago, Defcon told his associates that some hacker had stolen all the site’s bitcoins, about $1.4 million worth, used to cover user balances for withdrawal.  

He temporarily closed the site to its 150,000 active users, let his staff know he had located where the stolen bitcoins were transferred and vowed to recoup his losses. The site reopened within a month.

–Ken Broder


To Learn More:

SF Man Said to Be at Helm of “Silk Road 2.2” (by William Dotinga, Courthouse News Service)

Feds Call New Silk Road Defendant a Flight Risk (by Larry Neumeister and Paul Elias, Associated Press)

FBI Arrests Alleged Leader of Silk Road 2.0 in San Francisco (by Marlize van Romburgh, San Francisco Business Times)

Study Argues that Online Sales of Illegal Drugs Actually Reduce Violence (by Noel Brinkerhoff, AllGov)

FBI Arrests Alleged Underground Drug Website Operator in San Francisco Library (by Ken Broder, AllGov California)

United States of America vs. Blake Benthall (Federal Complaint)

Operator of Silk Road 2.0 Website Charged in Manhattan Federal Court (Federal Bureau of Investigation)

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