Last
week the FBI arrested a UT Grad and main architect of the Silk Road website
that trafficked in all manner of illegal wares, named Ross Ulbricht. Ulbricht went by the online handle “Dread
Pirate Roberts” which I guess is hipster nerd cool for a criminal. On Silk Road, over a million registered users
could buy and sell all manner of illegal drugs, forged documents, fake
identifications, and illegal services.
This was made possible by a computers encryption process known as “onion
routing” whereby computer traffic is rapidly re-routed through multiple
computers to disguise both the physical presence of the computer user and the
IP address (location identifier of the individual computer or network
used). Transactions were completed in
Bitcoins, the online-only currency invested in heavily (if not created by the
Winklevoss twins who allegedly created Facebook with Mark Zuker). (see more here)
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| What's left of Silk Road |
Bitcoins are not tied to any government which authorities
have long said was created for money laundering. It seems to be so. The nominal value of bitcoins has plummeted
since Silk Road was taken down, showing
that their only real purpose was to facilitate illegal transactions.
The
feds won’t say exactly how he was tripped up, but it may have been as simply as
intercepting a package of fake passports coming across the border from Canada
with Ulbricht’s face all over them. The
feds had made hundreds of purchases of illegal drugs from Silk Road while building
their case and tracking Ulbricht. They
also crossed paths with Ulbricht when he tried to hire a hitman to off someone
who was trying to extort him and move in on his empire. The hitman he tried to hire was an undercover
agent.
The
feds eventually did beat the “onion routing” and arrested Ulbricht in the San
Francisco public library as he was internet chatting to the informant. They obviously won’t say how. Suffice to say that other computer users now
aren’t going to be a confident in their “onion routing” systems or their online
marketplaces. The demise of bitcoins,
whose value was tied to its use as a currency for online transactions for
illegal items shows that online illegal markets have themselves taken a hit, at
least for now.
Full
Story: Houston Chronicle: http://www.chron.com/news/houston-texas/article/Feds-Texas-grad-ran-vast-underground-drugs-4863922.php?cmpid=hpts
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