Two agents in the Silk Road black market case were convicted of embezzlement

Building the Silk Road

Ulbricht was born in Texas, USA. He received a full scholarship from the University of Texas as an undergraduate and later received a master's degree in materials science and engineering from Pennsylvania State University. After graduating in 2009, out of his belief in the free market and his longing for anarchism, he taught himself programming and founded the Silk Road website under the pseudonym "Dread Pirate Roberts."

The functionality of his website is not much different from eBay, Taobao and other websites. There are sellers and buyers, and a rating system to screen products. But the difference is that Silk Road is more in line with Ulbricht's philosophy, anarchy-like freedom. Anyone can sell drugs, credit card account passwords and other contraband on this platform.

To build an ordinary website, you need to apply for a domain name at the domain name administration, such as abc.com. At this time, you need to register the domain name owner information and fill in the real information, otherwise the administration has the right to deactivate your domain name. At the same time, you also need a website server with an independent IP, and when the user enters the domain name, he can connect to the server pointed to. In this way, if you want to engage in illegal activities on the website, it is basically impossible, otherwise someone will come to your door immediately. In order to achieve the purpose of server anonymity, Ulbricht used Tor onion routing. Through this anonymous software, anonymous URLs such as abc.onion can be generated at any time. When your computer is configured as a host, any member of the Tor network can access this server. At the same time, any member does not know each other's real IP address through the Tor network, let alone the real address of the server, and will not be accessed by networks outside Tor, successfully realizing the anonymity function. Another threat to the leakage of personal information is the payment system. In order to avoid privacy leakage in bank card payments, "Silk Road" uses an anonymous payment method: Bitcoin.

The website was finally launched in 2011. According to Ulbrich, the website had its first customer without any promotion, and it continued to grow, with buyers and sellers registering. A few months later, it became the largest black market platform on the Internet. He said that people couldn't understand why he was so busy without a job. He just said that he was doing hundreds of thousands of dollars in global trade. By 2013, it was estimated that the website had sold about $1.2 billion worth of drugs worldwide, and he personally extracted up to $80 million in commissions.

Website Destruction

A tall tree attracts the wind. The growth of the anonymous black market has successfully attracted the attention of the FBI. According to police officers who scanned incoming packages from abroad, they found hundreds of carefully packaged drugs. The sender's address was anonymous, and the drugs were accompanied by a small note urging buyers not to forget to rate. Ulbrich did not care about the media's calls to shut down the website, and told his girlfriend Bates that he felt he was exercising his right to defend his freedom. In fact, at this time, federal agents had quietly disguised their identities and infiltrated the "Silk Road". By analyzing the error messages thrown by the server, they hacked into the "Silk Road" server in Iceland and successfully obtained the website's internal emails and transaction data.

The fox always reveals its tail. Ulbrich once posted a job advertisement on a forum using the online name altoid, claiming to be a Bitcoin financial company with an investment background, recruiting an IT expert. In the message, he left a Gmail email address using his real name, Ross Ulbrich. Later, he asked a technical question on a Q&A website and applied the code to the Silk Road website. Although he deleted the question later, the damage was done.

According to legal documents, a website employee had stolen bitcoins from users (later reported that it was stolen by agents), which annoyed Ulbrich so much that he decided to hire someone to kill him. Unfortunately, this was a "phishing" operation, and Ulbrich hired an undercover federal agent who provided a fake picture to kill him, and Ulbrich paid $80,000 as promised. There was also a registered user named FriendlyChemist who claimed to have the real information of many buyers and sellers and asked for hush money. According to prosecutors, Ulbrich paid a total of $730,000 to hire someone to kill FriendlyChemist and other users who threatened to leak user information.

The roundup was scheduled for October 1, 2013. After the agents had a large amount of evidence proving that Ulbrich was the "Dread Pirate Roberts" on the Internet, they quickly arrested Ulbrich in a public library when he opened his computer and entered the password to log in.

Ultimately, young Ulbrich was found guilty, based on evidence including the detective's fishing chats, the drug dealer, and his girlfriend, Bates. In May 2015, Ulbrich was sentenced to life in prison.

But the story doesn’t end there.

Agents involved

Although the Silk Road was destroyed, as several US Bitcoin trading platforms went bankrupt, another scandal was uncovered. The two were members of the Silk Road Action Team, one named Carl Force and the other named Shaun Bridges. During the investigation, they hacked into the server and pretended to be Silk Road employees. After gaining control of user accounts, they could not resist the temptation of money and quietly transferred Bitcoin to their personal accounts. The former was also suspected of blackmailing Ulbrich, the owner of Silk Road.

Both pleaded guilty to money laundering and obstruction of official duties. Carl Force worked as an agent and investor for the Bitcoin exchange CoinMKT. Shaun Bridges stole a total of $800,000 worth of Bitcoin and held it in custody at the Mt.Gox Bitcoin exchange, which went bankrupt shortly afterwards. In October this year, the judge sentenced Carl Force to 87 months in prison, and in November, Shaun Bridges was also sentenced to 71 months in prison.