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Your Crack Is In The Mail

Your Crack Is in the Mail

Why did it take the FBI so long to shut down Silk Road?

On the Silk Road website, every drug you can think of — and a dizzying number of others, too — have been on open sale for years, from crack, heroin, and LSD, to a new generation of “research chemicals” that exist just outside the reach of the law.

Activists, dealers and users have effectively used the site to declare an independent state online where all commerce, within certain boundaries, is permitted, and all under the auspices of the site’s owner, who was — until this week — known as The Dread Pirate Roberts. The FBI allege that his true identity is that of Ross Ulbricht, the 29-year-old who was arrested in a raid on a public library in San Francisco on October 2.

Ulbricht, originally from Austin, Texas, had been living in San Francisco under a fake name, say officials.

Until it was shut down by law enforcement, Silk Road had everything: Norwegians selling Cambodian mushrooms, Canadians selling Afghan heroin, and Brits selling concentrated cannabis tinctures from ancient Nepalese cannabis landraces. Most of the products there were illegal, but whether you wanted a quarter gram of heroin or a gram of glittering Peruvian escama de pescado cocaine, you were in the right place. Buying was as simple as Amazon or eBay: a simple matter of adding the goods to your shopping cart, and paying for them. The money was held in an escrow account hosted at the site, and although you had to supply a delivery address, this could be encrypted, and then deleted as soon as the goods turned up.

Silk Road’s turnover reached $22 million a year within its first year of operation, according to security researcher Nicolas Christin, and the site’s owners took a commission on each sale of around six per cent — or $143,000 per month. In its indictment, the FBI says that Ulbricht pulled in $80 million during his time at the helm.

The site was not just popular for buying and selling, either. Its forum was busy too, with over 100,000 posts, 9,000 topics, and 11,000 users in the bustling community pages. The conversations there would weave around the site’s holy trinity: drugs, smuggling and cryptography. All this had made it the most popular among a growing, hidden network of drug dealers whose activities were hosted online. So how come these services continued to exist, even though they are breaking the law in such a flagrant manner?

Life on the Dark Web

In order for its customers to be completely untraceable, and therefore invulnerable to legal prosecution, the Silk Road was hosted on a hidden service, buried away on the Dark Web, far from the reach of Google. Their home is Tor, an alternative web-like space that swarms with users who travel through virtual tunnels that exist beneath the everyday web. Users — both dealers and their customers — have complete anonymity, and until it was revealed that he had made a series of calamitous errors, so did its owner.

Tor was created in 2001 by two computer science graduates at the Massachusetts Institute of Technology. They took a piece of undeployed software that had been written by the American Navy in 1995 to enable simple, anonymous internet use, and released their own version of it online, with the Navy’s permission.

“The navy had this project called Onion Routing, and it’s still going today,” explains information activist Andrew Lewman, who is the mouthpiece of the Tor organization.

“Its goal is to defeat network traffic analysis, which is the ability to know who you are, who you’re talking to, and how much data you send and receive. If you think of envelope data from your postal system, that’s the basis of intelligence gathering: For whatever reason, the Navy wanted this technology — they started the project but they didn’t have any intention of releasing it publicly. So Paul Syverson, a mathematician who’s still the core researcher for onion routing for the Navy, met grad student Roger Dingledine at a conference.”

“Roger said, ‘Have you ever thought of putting this on the internet?’ At the time the Navy had no plans for deployment. But Paul said sure.”

The original aim of the MIT grad students, Roger Dingledine and Nick Mathewson, was to give users control over their data when they went online. This was during the first dotcom boom, and many companies were giving away services for free — or rather, in exchange for your data and your browsing habits, which they would then sell on to third parties. Information activists rejected that business model and wanted to offer an alternative: so Dingeldine and Mathewson created Tor.

The vast majority of Tor users are simply people who want privacy when they go online, as the information gathered on us by search engines and social media grows daily. When researching sensitive or medical matters, some users don’t want Facebook or Google searches sending unsettlingly accurate adverts back at them. There were 36 million downloads of the software last year, and around one million daily users. In repressive regimes such as Iran, Tor users can access sites that are blocked by the government. But others, as The Dread Pirate Roberts knew, would use it to flout the law.

Inside the system

Like any other successful online retailer, Silk Road had its own reputation system. The forums at the site offered crowdsourced proof of the site’s best vendors and its worst scammers. In June 2012, when I was researching my book Drugs 2.0, reviews for the best LSD vendor ran to 81 pages, and had racked up 50,000 views; reviews of heroin dealers, meanwhile, ran to 22 pages with 8,000 views. Cocaine vendors were highly scrutinized — reviewed in a 292-page behemoth of a thread with over 90,000 views — while MDMA ran in at 129 pages with over 60,000 views.

The vendors themselves were often involved, and some have been happy to talk to me about their involvement with the site. One told me, for example, how dealing drugs on the site came with its own set of moral problems.

“The prospect of a twelve-year-old loaded to the gills on my MDMA is not a pleasant one,” he explained. “Enabling self-destructive/addictive behaviour is also upsetting to me. Dealing IRL, you can recognize abuse and let customers know you’re concerned, but online, there’s no way to tell.”

He admitted, though, that vending on the site was financially much more lucrative than selling in real life.

“IRL, you’re limited by your social circles, but here it’s only a question of supply, capital and hours in the day.”

“Packaging straight-up sucks to do,” he continued. “It’s extremely monotonous and requires a good degree of concentration to avoid making any mistakes that might endanger the customer receiving. Sometimes during especially busy periods, I spend 70, 80, 90 hours a week packaging, all of it extremely dull. Apart from the risk of being locked up for the next decade, it’s definitely the worst part. Dealing in real life is much more pleasant.”

Greater paranoia about the authorities is another downside: “Public drug markets are a giant middle finger to many powerful interests and so the political motivation to shut them down and lock up the people participating is out of proportion to the actual volume of illicit trade taking place. Last summer I was the ‘number one’ (basically highest-volume) vendor on the site for a while, and the fear really crept up on me. I’d lie awake at night thinking about it, worrying I was going to have my door kicked down and be dragged away at any moment. I’m much more comfortable with it now, but if I had known from the start how much mental torment and stress were involved with vending, I probably wouldn’t have started.”

However, there are upsides, he says: “I find the day-to-day grind of vending online worse than dealing IRL, but the human interaction online is often a lot more uplifting in some ways. Most people I sell to IRL are club kids/raver types so they’re more predisposed towards hedonism (which I of course have nothing against!) than using for more spiritual/emotional reasons so the feedback is less touching, which is a definite negative for me. I get emails from Silk Road customers telling me how the drugs I sell have helped them with emotional or spiritual or sexual problems, people mending broken relationships, rekindling intimacy.”

The motivation for people to use the Silk Road was high, given the prevailing legal climate. Mail is a vast trade, and small envelopes and packages are seldom opened, much less X-rayed or sniffed by dogs. That means capture, prosecution, and imprisonment look unlikely.

But if you were worried, one vendor on the site even offered a fake package service for the super-cautious: he’d deliver you an empty box or envelope for a small charge, just to get the mailman used to delivering packages from overseas.

Packaging by many vendors on the site was said to be exceptionally ingenious, and the protocol on the forums and in feedback forms below purchases was that these should never be discussed publicly, even on the Dark Web. What’s more, there are vendors in many countries so there’s no need to worry about international postal or customs issues: users in the US or UK or the Netherlands — or indeed, in dozens of countries worldwide — can buy drugs from dealers in their own countries, removing the danger of border staff targeting your package.

In just under two years, the Silk Road administrators used technology and ingenuity, along with innovative crowdsourcing solutions to internal and external threats, to achieve what thousands of campaigners had toiled since the 1960s to achieve: the right for people to buy and sell natural and artificial chemicals that affect their consciousness in ways they choose without interference from the state. It is a paradigm shift that cannot easily be reversed.

And even though the FBI believes it has arrested the site’s owner, the Silk Road’s payment and communication systems remain essentially impenetrable. It’s here that the early net evangelists’ vision of a world where information flows freely, where no central hierarchy rules, and where the network takes precedence over the individual has finally been realized. Whether you celebrate or lament the fact that drugs such as cocaine, heroin, LSD are now available online with just a little effort and very little likelihood of legal consequences, it is undeniable that we are at a turning point in legal history.

Through a decades-long process of chemical and technical innovation, human ingenuity has beaten the laws made by a political system that has responded to increased drug use by insisting on a harmful, expensive and counterproductive and ultimately failed strategy of criminalization.

Over the course of the century or so that drug laws have existed in any meaningful form, a clear pattern has emerged. As each law to prevent drug consumption is made, a means to circumvent it is sought, and found. Those means can be chemical, legal, social or technological. We stand today at a crossroads formed by those four elements, with the web making possible communication between distant strangers, facilitating the sharing of limitless quantities of information, and enabling the distribution of drugs anywhere in the world. Where do we go next?

1 comment

  • Voxnews

    Here is the propaganda from USATODAY on the Silk Road Situation

    Silk Road 101: How the "darknet" works.
    Law enforcement officials shut down Silk Road, a sophisticated black market website offering illegal wares and services from heroin to hit men. The internet site in the cyber underworld is known as the "darknet".
    Criminals who prowl the cyber-underworld's "darknet" thought law enforcement couldn't crack their anonymous trade in illegal drugs, guns and porn. But a series of arrests this month, including the bust of the black market site Silk Road, shows the G-men have infiltrated the Internet's back alley.

    Computer experts suspect the government simply beat the cyber-pirates at their own game: hacking.

    The Silk Road website, which has a customer-friendly electronic storefront that displayed bricks of cocaine as deftly as Amazon displays books, was the cyber-underworld's largest black market, with $1.2 billion in sales and nearly a million customers. Beyond illegal drugs, the site served as a bazaar for fake passports, driver's licenses and other documents, as well as illegal service providers, such as hit men, forgers and computer hackers.

    FBI Agent Christopher Tarbell of the FBI's cyber-crime unit in New York called Silk Road "the most sophisticated and extensive criminal marketplace on the Internet today."

    Silk Road used an underground computer network known as "The Onion Router" or "Tor" that relays computer messages through at least three separate computer servers to disguise its users. Customers conducted business using a virtual currency called bitcoin. The site repeatedly assured its users that their illegal transactions were wrapped in layers of privacy.

    But the FBI's seizure of Silk Road's servers allowed agents to unwrap the website's innards, exposing the vendors' and customers' private accounts to law enforcement scrutiny.

    Q & A: A bit about bitcoin

    Court papers show that federal agents used the full bag of traditional investigatory tricks as well as high-tech cyber-sleuthing to dismantle Silk Road. The site's alleged operator made critical missteps that allowed agents to locate the website and link him to it, court papers show.

    FBI, DEA, IRS and Customs agents located six of Silk Road's supposedly off-the-grid computer servers hidden around the world, in places including Latvia and Romania, copied their contents and watched as buyers and sellers completed their illegal transactions. It shut down the website, seized its assets, including 26,000 bitcoins worth about $4 million, and arrested Ross Ulbricht, the alleged operator, in San Francisco on Oct. 1.

    The FBI estimates that Silk Road's operator made $80 million in commissions from the site's users, court papers say.

    Ulbricht is charged in federal court in New York with money laundering, drug dealing and conspiring to murder a witness. A second indictment filed in a federal court in Baltimore charges Ulbricht with drug dealing and attempting to have a former employee murdered.

    Ulbrict will be extradited to New York to face the charges. His court-appointed attorney, assistant federal defender Brandon LeBlanc, who said his client denied the charges at a court hearing Oct. 4, did not return phone messages left at his office.

    The investigation into the cyber-underworld swept up suspected drug dealers and buyers in the USA, Britain, Australia and Sweden with alleged ties to Silk Road.

    "These arrests send a clear message to criminals: The hidden Internet isn't hidden, and your anonymous activity isn't anonymous. We know where you are, what you are doing and we will catch you," Keith Bristow, director of Britain's National Crime Agency, said after the arrest Oct. 8 of four men for alleged drug offenses.

    The criminals, he said, "always make mistakes."

    The FBI hasn't said how it found Silk Road's servers or compromised them. Members of the FBI's cyber-crimes unit were not available, FBI spokesman Peter Donald said.

    "That is the $64,000 question. They have not explained how they did it," says Nicholas Weaver, a researcher at the International Computer Science Institute in Berkeley, Calif., who specializes in network security and underground economics.

    Weaver suspects from reading the court papers that federal agents found weaknesses in the computer code used to operate the Silk Road website and exploited those weaknesses to hack the servers and force them to reveal their unique identifying addresses. Federal investigators could then locate the servers and ask law enforcement in those locations to seize them.
    Silk Road

    Screen shot of the LinkedIn profile page of Ross Ulbricht.(Photo: LinkedIn)


    Authorities say Ulbricht started Silk Road on Jan. 27, 2011.

    By then, Ulbricht, 29, who grew up in Austin, had graduated from the University of Texas-Dallas, where he earned a degree in physics in 2006, school records show. He attended graduate school at Penn State, where he earned the prestigious Anne C. Wilson Graduate Research Award for materials science for the 2008-09 academic year, school records show. On his LinkedIn page, he identified himself as an entrepreneur and investor.

    Statements Ulbricht made in college and posts he made online show he leaned libertarian. On Facebook in 2010, he posted a page-long essay inspired by Independence Day. "Always, freedom arises in the absence of limitation," he wrote. He embraced Austrian economic theory, whose advocates favor strong protection of private property rights, but minimal economic regulation.

    On Silk Road, federal investigators say, Ulbricht called himself "Dread Pirate Roberts," shortened often to "DPR." The moniker comes from a character in the novel The Princess Bride, depicted as a ruthless pirate who takes no prisoners. Eventually, "Captain Roberts" is revealed as a series of people who pass on the "dread pirate" alias, and his fearsome reputation, to a successor on retirement.

    In one post to the site, after users complained about a hike in Silk Road commissions, investigators say, Ulbricht wrote, "Whether you like it or not, I am the captain of this ship. You are here voluntarily, and if you don't like the rules of the game, or you don't trust your captain, you can get off the boat."

    In San Francisco, where court papers say he moved in September 2012, Ulbricht lived quietly and cheaply, first bunking with friends, then renting a room for $1,000 a month. He paid in cash. His roommates knew him as "Josh" and told authorities he spent a lot of time on his computer.

    This artist rendering shows Ross William Ulbricht appearing in Federal Court in San Francisco on Friday, Oct. 4, 2013.(Photo: Vicki Behringer, AP)

    Court papers say Ulbricht procured computer hosts for the Silk Road website, wrote most of the computer code and maintained the security on the site by himself.


    Central to the operation of Silk Road was a complex underground computer routing system known as Tor. Ulbricht allegedly used the system to hide the location of the computer servers that hosted the Silk Road website.

    But Tor is no secret, especially to the U.S. government.

    The U.S. Naval Research Lab developed onion routing, the concept behind Tor, as a way to protect naval communication so an enemy could not trace computer messages and detect a ship's position. Every computer on the Internet has an Internet Protocol, or IP, address that can be used to find its physical location. Tor ensures privacy by randomly routing computer messages through several places on the Internet, wrapped in layers of encryption, so no single point can link the source to the destination.

    The routing system is public and maintained by a non-profit organization that runs on donations from a variety of organizations, including Human Rights Watch, Radio Free Asia, the National Science Foundation and Google. Dissidents in countries that restrict Internet access use Tor to publish out of government reach. Journalists use Tor to communicate with confidential sources. WikiLeaks used Tor to collect documents from whistle-blowers who wanted to remain anonymous. Law enforcement agents use Tor to visit websites without leaving a record of a government computer or IP address in the Web's log.

    Though some government agencies may use Tor for their own research or communication, the National Security Agency seeks to unmask anonymous Internet communication, director of National Intelligence James Clapper said in response to documents revealed by fugitive whistle-blower Edward Snowden.

    "The Intelligence Community's interest in online anonymity services and other online communication and networking tools is based on the undeniable fact that these are tools our adversaries use to communicate and coordinate attacks against the United States and our allies," Clapper said Oct. 4.

    Tor also hosts black markets, such as Sheep Marketplace and Black Market Reloaded, that deal in guns, drugs, stolen credit card numbers and child pornography. The United States seeks the extradition of Eric Marques, who was arrested in Ireland for allegedly hosting a website on the Tor network that allowed people to share child pornography.

    Silk Road created a private network through Tor by using software to build encrypted connections through relays on the network. The system is created so no single relay, or server, knew the complete path. A computer algorithm on Tor generates a complex Web address that ends in .onion and can be accessed only by downloading Tor software.

    Once logged into Silk Road, buyers and sellers could conduct business in a virtual currency called bitcoin, which, unlike a credit card or a check, leaves little traceable information. Silk Road used a bitcoin tumbler that sent the individual transactions through a complex series of dummy transaction to disguise the link between buyers and sellers.

    DEA agents learned of Silk Road within months after it went online. In June 2011, Sen. Charles Schumer, D-N.Y., called on federal agents to investigate it. Court papers indicate federal agents began making hundreds of undercover purchases from the site in November 2011.


    To attract customers and vendors and direct them to the secret site, Silk Road's operator initially had to publicize it on the Web.

    One FBI agent did a simple Internet search and found a post from Jan. 27, 2011, on a forum for people who use magic mushrooms called "Shroomery" (http://www.shroomery.org) in which a user identified as "altoid" mentioned Silk Road under the guise of seeking information. The post explained that it's a Tor-hidden service and the address could be found at silkroad420.wordpress.com. "Altoid" posted about Silk Road two days later, this time at "Bitcointalk.org," an online discussion forum.

    "Altoid" posted again Oct. 11, 2011, in "Bitcoin Forum," seeking "the best and brightest IT pro in the bitcoin community" to help develop a bitcoin start-up company. This time, the FBI caught a break: "Altoid" instructed potential candidates to reply to his Gmail address, rossulbricht@gmail.com.

    The FBI subpoenaed subscriber records from Google for the Gmail address, which was registered to Ulbricht and included a photo that matched a photo of Ulbricht on LinkedIn. His Google profile included YouTube videos from the Mises Institute, an Austrian economic think-tank.

    In his postings on Silk Road's forum, the site operator "Dread Pirate Roberts' " signature included a link to the Mises Institute website. "Dread Pirate Roberts" often cited Austrian economic theory and the works of Ludwig von Mises as the philosophical underpinning of Silk Road.

    The Google records showed every IP address used to access Ulbricht's Gmail account this year from Jan. 13 to June 20, court papers said. The IP address associated with the Gmail account led to a computer in an apartment on Hickory Street in San Francisco, where Ulbricht had moved in September 2012. The logs indicated Ulbricht accessed his Gmail account from a cafe on Laguna Street, less than 500 feet from the apartment, court papers say.

    Ultimately, the FBI linked the computer at the Hickory Street apartment and its IP address to code on the Silk Road server that allowed the computer access, court papers say.

    The FBI got insight into Ulbricht's computer code from an undisguised post on a computer programming website. On March 5, 2012, Ulbricht opened an account under his own name on stackoverflow.com, posted 12 lines of computer code and sought advice for fixing a coding problem. Realizing his error, he quickly deleted his real name and changed his user name to "frosty" and his e-mail to frosty@frosty.com.

    Forensic analysts found a revised version of the same code on the Silk Road website, court papers say. The analysis also found encryption keys that end with "frosty@frosty."


    The FBI used one of its tried and true techniques: the sting.

    An FBI agent went undercover in 2012 posing as a drug dealer who wanted to do business on Silk Road. The agent e-mailed "Dread Pirate Roberts," directly seeking help finding a buyer for a kilogram of cocaine. Ulbricht allegedly instructed one of his employees to help. The alleged buyer, who turned out to be the employee, deposited $27,000 in bitcoins in a Silk Road account and arranged a shipment to his home. Federal agents arrested the employee, who is not named in court papers.

    On Jan. 26, the FBI says in court papers, Ulbricht e-mailed the undercover agent to say the employee had been arrested and had stolen funds from other Silk Road users. He allegedly asked the agent to have the employee beaten up and forced to return the money.

    The next day, Ulbricht allegedly asked the FBI agent to have the employee killed because "now that he's been arrested, I'm afraid he'll give up info." The FBI says Ulbricht agreed to pay $80,000 for the hit and on Feb. 4 wired $40,000 from Technocash Limited in Australia to a bank account at Capital One in Washington. Ulbricht deposited another $40,000 after the undercover agent e-mailed him staged photographs of the killing, court papers say.

    That case, filed in May and unsealed with Ulbricht's arrest Oct. 1, charges Ulbricht with a drug dealing conspiracy and attempted murder of a witness.

    By July 23, investigators had located at least one of Silk Road's servers in a foreign country, which the FBI has not identified. IP addresses listed in court papers are linked to servers in Iceland, Latvia and Romania, according to Internet registries. Once the FBI found the server, it executed a Mutual Legal Assistance Treaty request that allowed law enforcement in that country to make a copy of the Silk Road server and give it to the FBI. The snapshot gave the FBI records of 1.2 million transactions from Feb. 6, 2011, to July 23 and all of the site operator's e-mail exchanges.

    How the FBI located a Silk Road server remains a mystery. Computer experts don't know for sure how federal investigators defeated a system that most people, including Ulbricht, thought impenetrable. Jerry Brito, a senior research fellow at the Mercatus Center at George Mason University with expertise in technology regulation, says many experts have speculated that the FBI has identified a flaw, or back door, in the Tor system that computer experts have missed.

    More likely, Brito says, the FBI compromised Silk Road by bypassing the website's security through weaknesses in Ulbricht's computer code, hacking into the site and issuing computer commands that allowed it to act like the site's administrator and talk to the server. The FBI's computer experts knew from the posts on the computer programmer forum that Ulbricht had coding challenges.

    "We know he was not the most proficient coder in the world," Brito said. "It's very easy, if you are a novice programmer, to do things that you're not aware of that can compromise security."


    Federal investigators also had a stroke of luck. On July 10, as part of a routine search at the Canadian border, customs agents intercepted a package of nine fake IDs. Each of the IDs had different names, but the same picture of Ulbricht. E-mail exchanges found on the Silk Road server indicate "Dread Pirate Roberts" had sought IDs in June from several Silk Road vendors so he could rent servers under an assumed name to buttress Silk Road's reliability.

    On July 26, three days after federal investigators located one of Silk Road's servers, investigators from Homeland Security paid Ulbricht a visit at his San Francisco apartment.

    Court papers say Ulbricht refused to answer any questions when investigators confronted him with the fake IDs, except to point out that "'hypothetically' anyone could go onto a website named 'SilkRoad' on Tor and purchase any drugs or fake identity documents the person wanted."

    On Oct. 1, federal agents waited until Ulbricht logged into his computer before sweeping in to the Glen Park branch of the San Francisco Public Library to arrest him, making it easier for agents to simply plug in a thumb drive and download everything on the computer without having to break his passwords.

    The agents found the alleged Dread Pirate Roberts in the science fiction section.

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