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Sunday, May 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

With Arrest, Silk Road 2.0 Seized by Uncle Sam

MANHATTAN (CN) - Federal prosecutors announced the seizure of "dozens of online 'dark markets'" Friday connected to charges filed a day earlier over Silk Road 2.0.

The government shut down the first incarnation of Silk Road in 2013 after discovering that its operators had used the website to sell millions of dollars in illegal drugs and other black-market items.

Four men behind the site allegedly sold hundreds of kilograms of heroin, cocaine and methamphetamine to more than 100,000 buyers, and also provided a platform for hackers, password stealers and keyloggers to purchase malware.

Prosecutors said Wednesday that Blake Benthall, a 26-year-old known by his online alias "Defcon," resurrected his own version of Silk Road in 2013 from his San Francisco home.

Benthall was arraigned in San Francisco that day for conspiracy charges tied to narcotics and fraudulent-documents trafficking, computer hacking, and money laundering. He faces up to life in prison.

The Justice Department announced Friday that it has seized the website as well as dozens of other "underground markets trafficking in illegal drugs, firearms, stolen credit cards, fake passports and ids, computer-hacking services, and counterfeit currency."

The sites allegedly operated on the "Tor" network, a complex of computers around the world designed to conceal their true IP addresses - and therefore the users' identities.

Although just a year old, the Justice Department says that Silk Road 2.0 has supported the sales of hundreds of pounds of drugs and the laundering of millions of dollars. The site generated more than $8 million a month and had 150,000 active users.

Users paid for the illegal goods in Bitcoins - as was the norm on the original Silk Road -to protect their anonymity and evade law enforcement, prosecutors say. As of last month, the site had 13,000 listings for illicit drugs, and also advertised fraudulent documents and hacking tools and services for sale.

Since taking over as administrator in December 2013, Benthall allegedly controlled all aspects of the Silk Road 2.0 site. Prosecutors say he oversaw infrastructure, programming, terms of service, commissions paid and a small staff of moderators who assisted with the site's day-to-day operations.

A Department of Homeland Security investigator took the keys to the kingdom after successfully infiltrated the site's support staff, according to the complaint. From there, the agent allegedly interacted directly with Benthall in the running of the site.

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