It was a long-time coming, but it’s over.
‘Dread Pirate Roberts’, who American authorities have now identified as Ross Ulbricht, was arrested last night for heading up the world’s largest black-market website, Silk Road.
The site itself is a haven for illegal activity. Drugs and weapons are the site’s bread and butter, although various other materials have been sold as well. It was one of the most lucrative black-market sites in the world, with estimates of sales worth up to $45 million every year.
One estimate pinned the site as making up to $1.2 billion over two years.
But now, it’s rover. Ulbricht was arrested at a San Francisco public library.
In an indictment from the Federal Bureau of Investigation released last night, the organisation said the site had as many as 13,000 listings for illicit drugs, and others for illegal services such as hacking and forgeries. Selling contact lists, connections and even hit men make money for the site.
“Not only are the goods and services offered on Silk Road overwhelmingly illegal on their face, but the illicit nature of the commerce conducted through the website is candidly recognised in the Silk Road wiki,” it said.
The complaint even alleges Ulbricht, or Dread Pirate Roberts, introduced a new category for forgeries in 2011.
FBI agent Christopher Tarbell called the site the “most sophisticated and extensive criminal marketplace on the internet today”.
So who’s allegedly behind this haven for criminal activity?
An engineer. A scientist.
Ross Ulbricht operated the site from San Francisco, the FBI alleges, where he used the alias Dread Pirate Roberts. Even under his alias, Ulbricht was intensively secretive – he used several technological methods of masking his whereabouts.
In August, Ulbricht spoke with Forbes using his alias and said he wouldn’t even give his name to his closest advisors, nor would he meet in person with them.
But Ulbricht is an accomplished man, not an unknown hacker. He has a master’s degree in material sciences from Pennsylvania State University. The ABC has quoted his father, Kirk, as saying he did “amazing research on crystals”.
“He is a really stellar, good person and very idealistic,” his mother, Lyn Lacava, is quoted as saying.
“I know he never meant to hurt anyone.”
Ulbricht also attended the University of Texas.
He even has a LinkedIn page. After studying science, his goals “shifted” to use “economy theory as a means to abolish the use of coercion and aggression”.
The page even lists him as the chief executive of a charity called Good Wagon Books between 2010-11.
Some of the allegations against Ulbricht are frightening. In the FBI criminal complaint, it’s alleged he communicated with Silk Road users to harm another user.
“DPR’s private-message communications from March and April 2013 reveal at least one occasion when DPR solicited a murder-for-hire of a certain Silk Road user,” the complaint alleges.
Ulbricht appeared in court yesterday. A bail hearing is set for this Friday.
Meanwhile, the value of digital currency Bitcoin has taken a tumble due to the arrest – the FBI confiscated $3.6 million worth of the currency.
Bitcoins are valued by a community of online users due to their anonymity. Before the arrest, Bitcoins were valued at $US140 each – they fell to $US129 afterwards.
Bitcoins have been used for legitimate purposes, but they are also valued for their untraceable quality – making them perfect for illegal transactions.
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.