Lessons from the Silk Road

Screen Shot 2015-03-11 at 9.17.42 AMBy Juliya Ziskina

After a several weeks-long trial, a federal jury found Ross Ulbricht guilty of running and operating the online black market known as Silk Road on February 4, 2015. (We previously covered opening statements in the case here.) The jury deliberated for only three and a half hours before convicting him on all counts, including conspiring to sell narcotics, hacking software and counterfeit documents, and a “Continuing Criminal Enterprise” charge, commonly known as the “kingpin” charge usually reserved for organized crime bosses. He faces a maximum penalty of life in prison. Ulbricht was accused of being the “Dread Pirate Roberts,” the “ringleader” of Silk Road, which he started in 2010 in order to sell hallucinogenic mushrooms. It then grew into a digital marketplace for narcotics and other illegal items like fake passports. Silk Road was cloaked in the Tor anonymity network to hide it from view and used Bitcoin as its currency of choice due its difficulty to track. The site was eventually shut down in 2013 when the FBI seized its servers and arrested Ulbricht.

The FBI claims that it was able to uncover the Silk Road servers via a software flaw on the site’s login page that revealed an IP address. That IP address then led to a location in Iceland where the Silk Road server was hosted. However, some members of the security community surmise that the FBI hacked the login page to force the IP address instead, which is illegal and could set a problematic legal precedent. Continue reading

Silk Road Trial Begins: Is Ulbricht the Dread Pirate Roberts?

Screen Shot 2015-01-21 at 12.01.03 PMBy Peter Montine

The case of United States v. Ulbricht, which is being called The Silk Road Trial, began last week in Manhattan, New York. Silk Road was an online black market where users could anonymously buy and sell various illegal items, especially drugs. It was able to stay anonymous and untraceable by operating on Tor (“The Onion Router”) network, an anonymous web browsing system, and by requiring all transactions to be paid in Bitcoin, an anonymous electronic currency. Ross Ulbricht, the alleged founder and kingpin of Silk Road, was arrested on October 1st, 2013, in a public library in San Francisco by Homeland Security Special Agent Jared Der-Yeghiayan. After a grand jury indictment, Ulbricht’s trial started this week in a Manhattan courthouse.

Assistant U. S. Attorney Timothy Howard began his opening statement by explaining how law enforcement officers caught Ulbricht communicating online using the pseudonym Dread Pirate Roberts (DPR), the leader of Silk Road. Joshua Dratel, Ulbricht’s defense attorney, used his opening statements to argue that Ulbricht was not DPR and was not associated with Silk Road as it was when it was shut down. He did, however, admit that Ulbricht was the founder of Silk Road. Dratel stated that Ulbricht had originally created Silk Road as a “free-wheeling, free market site, that could sell anything, except for a couple items that were harmful.” However, Ulbricht later gave the site to others, who made it into the black market that it eventually became. Continue reading