Silk Road was shut down and the FBI has arrested the man who runs and created the most sophisticated online drug bazaar to date. Ross William Ulbricht was arrested on Tuesday afternoon charging him with drug trafficking, money laundering and computer hacking, according to CNN Money on Oct. 2.
This website, which had almost one million registered users, sold cocaine, heroin and most any type of drug you could possibly want and they were delivered right to you. The website also had links to hit men and you could get everything you needed to hack a computer on this site.
This wasn’t an easy feat for the FBI, as the website was setup as a “tumbler.” This is a system that is complex and used countless dummy transactions to digitally conceal where the money was coming from. The website used bitcoins in lieu of money, which also made it harder to trace.
For two and a half years, the FBI has been hot on the trail of finding the origin of Silk Road and finding the master mind behind this illegal drug selling website. The net worth of the website is about $85 million.
Besides leaving a lot of unhappy drug users in the bust’s wake, the bitcoin took a hit after the news of the federal bust was released online. The digital money went from a high of $141 to below $120 today.
The FBI was able to buy drugs from Silk Road on several occasions. They purchased ecstasy, heroin, cocaine and LSD. Each time they would try and backtrack the shipment, narrowing it down until they hit pay dirt. They tracked down several of Silk Road’s servers including one that was out of the country.
Ulbricht went to great lengths to conceal where his illegal business was based and he went to great lengths to keep the FBI from finding out his identity, but in the end it was his “carelessness” that got him caught.
Someone using the name “Altoid” mentioned Silk Road in a forum online named bitcointalk.org. This happened during the earliest days of the FBI’s investigation. Much further into the investigation the same “Altoid” name appeared on the online forum once again. This time the person was looking for an “IT pro in the Bitcoin community.” The contact info was a Gmail account with Ulbricht’s full name. Bingo!
The man was arrested at the San Francisco Public Library, Glen Park Branch, at 3:15 p.m. on Tuesday. Ulbricht was known by a nickname online, “Dread Pirate Roberts.” The FBI teamed with other government agencies on the take down of the Silk Road website. The IRS, Drug Enforcement Administration, Department of Immigration and Customs Enforcement. The FBI was able to seize $3.5 million in bitcoins during Ulbricht initial arrest.