Two
days ago, we reported on the takedown of Silk Road, the billion-dollar online marketplace for
drugs and illegal services run by a UT grad.
Yesterday, we reported the stupid mistakes that led to
the takedown, and also noted that Ross Ulbricht, the site’s head, had made the
mistakes a year and a half ago, leading to the conclusion that the feds had
been watching the site and planning mass arrests.
They
started last night. The USA Today reports that
at least eight people have been arrested in the UK, Sweden and the US, with
wide speculation that this is far from over.
UK officcials warned that more arrests are on the way. The feds noted that they had managed to make
a copy of Silk Road’s server. With its
E-bay style seller and user ratings system, it’ll be really easy to see who the
biggest users are, and those are the folks that the authorities in multiple
countries are going after.
The
market in bitcoins (virtual currency used to buy and sell goods on Silk Road –
and run by the Winklevoss Twins of Facebook fame – continue to plummet in
value). Britain’s National Crime Agency
said it had seized millions of pounds (dollars) worth of bitcoins (though their
worth may be dwindling to nothing in the very near future).
The quote of the day comes from Britain's
Crime Agency, which became operational only this month, said the arrests sent a
message to criminals that the anonymity touted by sites like Silk Road is an
illusion.
"The hidden Internet isn't
hidden and your anonymous activity isn't anonymous," it said. "We
know where you are, what you are doing and we will catch you."
 |
| Winklevoss Twins: Faces of bitcoin, ought to be worried |
What this really shows is that the
feds are watching computer activity, and that the feds are patient. Statutes of limitations are relatively long
for criminal offenses, and not as much a concern in ongoing enterprises like
Silk Road, which grew larger and larger.
If I were the Winklevoss twins, I’d be really worried about a RICO
prosecution coming down the pipeline as the feds likely look into how bitcoins
were used and controlled in the process, as it’s bitcoins that greased the
whole system and it’s the Winklevoss twins who are the face of bitcoin (see
more here: http://money.cnn.com/2013/09/17/investing/bitcoin-winklevoss-twins/index.html)
Full story: http://www.usatoday.com/story/news/world/2013/10/08/silk-road-busts/2946925/
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