In October 2013, we reported on the sentencing of Ross William Ulbricht, 31, to life in prison for his operation of Silk Road, a virtual black market, under the name “Dread Pirate Roberts.” Though the $1.2 million per month isn’t the most staggering number we’ve seen when it comes to criminal enterprise, Silk Road stands as a pivotal entity in the criminal underworld. Think of Silk Road as the Facebook of the underworld. Facebook wasn’t the first social media network, but it too the concept the furthest and changed the game forever. Silk Road was not the first anonymous, internet-based criminal enterprise (known as “cryptomarkets”). It certainly wasn’t the last, evidenced by the 45 similar enterprises operating today. However, like Facebook, it revolutionized how things were done when it came to selling stuff from grams of hashish to rocket launchers.
Ross William Ulbricht changed the way the world views kingpins. Usually, when it comes to kingpins, folks will think of tough, suave, street-savvy individuals that came up through the streets and rose to the top level of their racket(s). Ulbricht brought a new view. He is a young, tech-savvy graduate of Penn State University from Austin, TX. He is absolutely a kingpin, as he was convicted according to the continuing criminal enterprise (CCE) statute, commonly referred to as the “kingpin charge.” Loosely, CCE charges are applied to people accused of running rackets of six or more people. While traditional organized crime kingpins are restricted by location and physical limitations, Ulbricht’s reach was endless, as his turf was the Net. Though Ulbricht was only splitting up $90,000 in profits monthly with associates, the book was thrown at him by US District Judge Katherine Forrest to make an example and discourage imitators. At sentencing, Forrest told Ulbricht:
“The stated purpose [of the Silk Road] was to be beyond the law. In the world you created over time, democracy didn’t exist. You were captain of the ship, the Dread Pirate Roberts. You made your own laws. What you did with Silk Road was terribly destructive to our social fabric.”
How did Silk Road sell over 24,000 illicit items in a two year span? First of all, it was a website, but not in the traditional sense. Silk Road (started by Ulbricht in 2011) operated on the Tor (“The Onion Router”) Network. This network was “originally developed by the US Naval Research Laboratory to protect online government communications.” On it, Silk Road users could shop anonymously without being detected. The sites hosted on Tor use .onion instead of .com, and cannot be found or accessed by basic web browsers (i.e. Google Chrome, Internet Explorer). According to Raw Story:
The Tor Network, which became more publicly accessible in 2010, is currently funded by a wide variety of public and private sponsors including the National Science Foundation (NSF) and Reddit. Torkeeps users’ identities untraceable and unidentifiable by “distributing your transactions over several places on the internet, so no single point can link you to your destination.”
But criminals can also enjoy the cloak of anonymity that Tor provides, buying and selling illegal items on Tor’s “hidden services” with little fear of being identified and caught by law enforcement.
Silk Road patron’s simply made accounts on the site and shopped for drugs, high-powered weaponry, fake passports, pornography and prostitutes like it was Amazon. They would select the item they were looking for, enter a quantity and pay for them using bitcoin. They item(s) were then shipped by snail-mail or “stealth” options, for a fee, which entailed more effort on the seller’s part to covertly send the item quickly. There were also digital products that could be downloaded immediately.
As mentioned before, Silk Road is not the only marketplace like this. As soon as they pop up, law enforcement works to shut them down. The investigations spur the “removal of tens of thousands of kilograms of illegal drugs per year from the streets, identify hundreds of human trafficking victims, and recover stolen property and data.” In Ulbricht’s case, millions of dollars worth of assets were also seized. Though the arrests do halt the operations, arrested members are replaced and business goes on as usual.
Like every other business, Silk Road helped the organized crime world adjust with the times using technology. The foundation has been laid, and the computerization of crime will adapt as technology evolves. In the words of the Silk Road website:
Silk Road is not a marketplace.
Silk Road is a global revolt.
The idea of freedom is immortal.