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Silk Road Shut Down, Founder Arrested, $3.6 Million Worth of Bitcoin Seized

Unknown Lamer posted about a year ago | from the breaking-the-law dept.

Bitcoin 620

New submitter u38cg writes Ross William Ulbricht, known as 'Dread Pirate Roberts,' was arrested in San Francisco yesterday and has been charged with one count each of narcotics trafficking conspiracy, computer hacking conspiracy, and money laundering conspiracy, according to a court filing. Silk Road has been shut down and some $3.6m in Bitcoin (26,000 Btc) seized. The question is — how?" onyxruby submitted a link to the criminal complaint (PDF; coral cache might work better). The court filing indicates that they seized the actual servers and recovered their contents, making numerous references to the private messaging system. Also according to the court filing, the Silk Road was used to sell ~$1.2 billion in illicit goods since being founded in 2011.

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HOW?? (-1, Flamebait)

Anonymous Coward | about a year ago | (#45015509)

PRISM.

Duh.

Re:HOW?? (5, Insightful)

i kan reed (749298) | about a year ago | (#45015625)

Or more specifically, monitoring known(or complicit) tor entry nodes, looking for quantity of activity corresponding to activity by roberts, back tracking to the origin IP address, getting a warrant for a full-on-monitoring of that address, verifying their target, then going for a bust.

Encryption and anonymyzing technology only works in as much as no one with any resources actively wants to figure out who you are. You might be able to hide your message, but you'll never hide your existence.

Re:HOW?? (3, Insightful)

Anonymous Coward | about a year ago | (#45015765)

Or more specifically, monitoring known(or complicit) tor entry nodes, looking for quantity of activity corresponding to activity by roberts, back tracking to the origin IP address, getting a warrant for a full-on-monitoring of that address, verifying their target, then going for a bust.

Encryption and anonymyzing technology only works in as much as no one with any resources actively wants to figure out who you are. You might be able to hide your message, but you'll never hide your existence.

You had me sold on this theory, right up until you said "warrant".

Then I knew it was bullshit.

Like our government feels the need to recognize the legal process anymore.

Re:HOW?? (4, Informative)

i kan reed (749298) | about a year ago | (#45015911)

You had me sold on this theory, right up until you said "warrant".

Then I knew it was bullshit.

Like our government feels the need to recognize the legal process anymore.

You know that he's going to have a trial, right? And that the FBI won't want him to get off because there was no warrant for the evidence the prosecution presents in that trial, right? There might very well be unconstitutional monitoring in this process, but to bring it to court and get a conviction, a warrant is necessary paperwork.

Re:HOW?? (4, Informative)

jandrese (485) | about a year ago | (#45016059)

It didn't stop them from abusing the crap out of the law when they got Kim Dotcom. That said, Kim might walk because there was so much prosecutorial misconduct.

Re:HOW?? (2)

Rinikusu (28164) | about a year ago | (#45015889)

I'd like to see how he implemented his back-end. Did he rely upon tor's anonymity and get lazy in the private messaging system? Were the logs/messages unencrypted and left in RAM? The new methods of catching computer crooks basically entail that the FBI sends in an IT team and nothing is touched or powered off (meaning mounted encrypted drives are live and they can run through them at will, etc).

Also, I remember reading an article by Schneier about the possibility for a well-funded attacker to effectively add tons of nodes, exit and internal, and then DDOS the non-controlled nodes to shape traffic in a manner where a good majority of the packets flow throw their own nodes, enabling them to track and compromise users and end service locations. We know the US .gov can fund an operation that large...

Just goes back to the old saying: when it comes to gang warfare, Uncle Sam has the biggest gang of them all...

Re:HOW?? (5, Insightful)

Anonymous Coward | about a year ago | (#45015655)

Yup. NSA -> FBI -> Parallel Construction Filter -> Arrest.

Tor was not designed to protect against an adversary that has a global view of all traffic.

Re:HOW?? (2)

Dunbal (464142) | about a year ago | (#45015805)

Yeah it's only the metadata. Keep telling yourself that so that you believe it.

Re:HOW?? (3, Informative)

Anonymous Coward | about a year ago | (#45015949)

No. http://www1.icsi.berkeley.edu/~nweaver/UlbrichtCriminalComplaint.pdf [berkeley.edu] has more info. DPR got extremely sloppy with keeping his identities separate. The Tor part worked fine.

Tor compromised (5, Insightful)

MetalliQaZ (539913) | about a year ago | (#45015513)

I think it can be argued that Silk Road practiced the use of Tor as well as anyone could have. They still got pinched. Although it may come out that an insider turned informant, it seems that the Tor system is compromised by the snoops.

Re:Tor compromised (5, Insightful)

Anonymous Coward | about a year ago | (#45015613)

*(Maybe. We don't know really.)

Silk Road, however, is exceptionally well known as an illicit enterprise, so despite anonymity of packet data (or not...) they're targeted anyway.

If known to be engaging in criminal activity, Tor is not really going to save you or be the critical flaw in your plan, either.

Re:Tor compromised (5, Informative)

Bulge Temptingly (982649) | about a year ago | (#45015635)

Nope, apparently Canadian authorities turned up some fake ID in a routine postal search.

Re:Tor compromised (0)

Anonymous Coward | about a year ago | (#45015773)

Source? Not in TFA...

Re:Tor compromised (5, Informative)

root_brewski (2839457) | about a year ago | (#45015969)

From Forbes: "Agents found Ulbricht after Canadian border authorities routinely checked a package intended for his San Francisco home and discovered nine fake identification cards within, which Ulbricht allegedly was seeking to obtain to rent more servers to power Silk Road as it massively expanded." Link: http://www.forbes.com/sites/alexkonrad/2013/10/02/feds-shut-down-silk-road-owner-known-as-dread-pirate-roberts-arrested/ [forbes.com]

Re:Tor compromised (5, Interesting)

gl4ss (559668) | about a year ago | (#45015917)

...a canadian routine postal search? sounds a bit of fabrication(you know, finding evidence illegally and then fabricating something for a bust). I seriously doubt they have fakeid smelling dogs.

but was he really hosting the operation from san fransisco? why, why on earth? why have anything tying him to it at home??

Re:Tor compromised (5, Insightful)

TheSpoom (715771) | about a year ago | (#45016065)

Wait, so after all the NSA bullshit, he was caught by Canada? Oh, the irony.

Re:Tor compromised (0)

Anonymous Coward | about a year ago | (#45015641)

If this goes to trial, I expect that it will be the classic blend of Good Old Fashioned Policework actually supported by high-tech information gathering. The former will be the one presented to the judge and jury; the latter will form the actual basis for the evidence.

Re:Tor compromised (1)

Anonymous Coward | about a year ago | (#45015651)

Its likely that this is the case. If the NSA records and keeps all encrypted communication, and it gives information to the FBI, then it was only a matter of time for them to run some network analysis to find the most popular tor hidden sites, look up who bought server time at those ip addresses, and then search their purchase history (though their credit cards) for larger purchases then they could afford on their official jobs.

Re:Tor compromised (1)

Anonymous Coward | about a year ago | (#45015673)

There are a few potential problems they could have ran into.
Especially since they probably do a lot of physical good distribution, which would be rather easy to follow.

Re:Tor compromised (2, Informative)

i kan reed (749298) | about a year ago | (#45015687)

Tor isn't a magic bullet. It's still fundamentally putting your trust in someone else. There's always a human element to relay communications. Any complicit person can yield some useful information. You can encrypt what you're saying, but someone has to know who you're talking to.

Re:Tor compromised (0)

Anonymous Coward | about a year ago | (#45015699)

we still don't know how they got to him, maybe they broke into the server, or they tracked him by other means (ex: not too savvy bitcon transactions).
TOR manages only the network layer, I'd like to know if and how they 'peeled the onion'

Re:Tor compromised (5, Informative)

Anonymous Coward | about a year ago | (#45015701)

it appears that agents found Ulbricht after Canadian border authorities routinely checked a package intended for his San Francisco home and discovered nine fake identification cards within, which Ulbricht allegedly was seeking to obtain to rent more servers to power Silk Road as it massively expanded.

source: http://www.forbes.com/sites/alexkonrad/2013/10/02/feds-shut-down-silk-road-owner-known-as-dread-pirate-roberts-arrested/ [forbes.com]

Re:Tor compromised (5, Interesting)

Drachs (29694) | about a year ago | (#45015705)

If I was guessing, I'd guess it was bitcoin, not Tor that did him in. He was moving way too much volume to hide all that. After all, the block chain is public. The FBI only has to lean on the various organizations that turn bitcoin into cash. If it gets the addresses of all their wallets, all their customer account information, and the identity of some coins that were spent on the silk road, it only has to work backwards to see who turned those coins into cash. People think bitcoin is anonymous, but it keeps a record of every transaction. This is probably the beginning of the end for bitcoin. I'm not sure it's mature enough to sustain itself without the black market support.

Re:Tor compromised (4, Insightful)

Maxo-Texas (864189) | about a year ago | (#45015997)

I'd guess it was being too big which did him in.

Greed and hubris-- always risky when doing illegal activities.

In fact- if I were doing something illegal- when regular articles about the silk road started being posted, I'd shut things down and take my profits.

If nothing else, those articles are embarrassing for law enforcement so they focus on that issue to stop the embarrassment.

Re:Tor compromised (0)

Anonymous Coward | about a year ago | (#45016061)

tor is compromised. It is easy to do if you have the resources. Guess who has the resources.

Re:Tor compromised (3, Informative)

Anonymous Coward | about a year ago | (#45015717)

On reddit it was reported that a parcel containing fake IDs (presumably to buy servers) mailed to DPR was intercepted at the Canadian border, and this is what lead to the arrest.

Re:Tor compromised (5, Informative)

Anonymous Coward | about a year ago | (#45015737)

Nope.
http://krebsonsecurity.com/wp-content/uploads/2013/10/UlbrichtCriminalComplaint.pdf [krebsonsecurity.com]
TLDR version:
A user named altoids advertised SR on various forums very early on.
Later the same user wanted some dev work done, used a gmail address as contact.
Same gmail address leads to a LinkedIn profile ... and a name and address.
Seize that dudes computers.
Find keys to the kingdom for the SR servers.

Re:Tor compromised (1)

Anonymous Coward | about a year ago | (#45016027)

Yep. As much as people want to point to some kind of conspiracy, the real issue is that the guy who ran SR left an easily followed paper trail, and the feds used this to catch him. If you're going to run a multimillion dollar black market empire, you need to make sure that you don't do anything to create a personally identifiable link to yourself. That's much easier said than done.

Re:Tor compromised (0)

interkin3tic (1469267) | about a year ago | (#45015751)

Assuming that's the case, can anyone venture a ballpark estimate as to how much taxpayer money went into breaking the scourge of Tor and Silkroad? How many dollars were used to make sure I was safe from roaming crackheads on their smartphones trying to loot USBs with bitcoins from corpses to save up for their next fix?

Re:Tor compromised (1)

cultiv8 (1660093) | about a year ago | (#45015777)

The sealed complaint from the U.S. Attorney suggest that, "As of July 23, 2013, there were approximately 957,079 registered user accounts reflected on the server." This information comes from an image of the "Silk Road Web Server" made by the FBI on that date.

Interested to find out how they got the server image.

Re:Tor compromised (1)

alen (225700) | about a year ago | (#45015781)

your cereal box wonder wheel encryption is no match for the NSA

Re:Tor compromised (0)

Anonymous Coward | about a year ago | (#45015985)

Naturally That's why I use the code wheel that came with SSI's Pool of Radiance.

Re:Tor compromised (2)

phantomfive (622387) | about a year ago | (#45015803)

It's was almost certain that Silk Road would be shut down from the moment it was started. Money has to trade hands, eventually you'll be able to trace it to the source.

Re:Tor compromised (4, Interesting)

circletimessquare (444983) | about a year ago | (#45015845)

it seems that the Tor system is compromised by the snoops.

(facepalm)

tor was MADE BY the snoops, FOR the snoops

it started as a us naval research lab project to allow spies and dissidents in hostile countries to communicate with the us spy network without fear of being spied on by hostile governments

let me repeat: tor was made by the american government

of course it's been decentralized since then, but you're an idiot if you don't think they still don't have their hooks in it

http://en.wikipedia.org/wiki/Tor_(anonymity_network)#History [wikipedia.org]

Re:Tor compromised (5, Insightful)

Dunbal (464142) | about a year ago | (#45015853)

it seems that the Tor system is compromised by the snoops.

The safest option is to assume that EVERYTHING is compromised nowadays. Your OS. Your security certificate server. Your ISP. Your VPN. SSL. Your webcam. Everything.

Re:Tor compromised (3, Interesting)

blueg3 (192743) | about a year ago | (#45015991)

That is an enormous logical leap. Silk Road was running a high-profile, long-running Tor service, which is inherently dangerous and certainly more dangerous than many other applications of Tor. Is there evidence that suggests they were particularly skilled in doing so safely? There are also a number of well-known (and nearly-unavoidable) attacks against the Tor design. They are difficult, but then, they've been running a high-profile site for a long time, which makes it a lot easier to be targeted by even difficult attacks.

Finally, there are plenty of ways for an operation that large to be undone that are much more likely compromise of Tor itself. Most of these things are solved by conventional police work because (a) "real" evidence looks a lot better in a trial and (b) people are a lot better at making mistakes than most security technologies.

Re:Tor compromised (2)

jovius (974690) | about a year ago | (#45015995)

Bitcoin is not an anonymous system, so the transactions should be trackable. I'd guess that's one of the weak links. Probably most of the users don't anonymize their Bitcoin usage. Silk Road may have accepted Bitcoins as a tip for example - it anyway gets a percentage of the transactions, and from all of the BC traffic a couple of hotspots can be identified.

The owner himself probably created a noticeable trail of real money. An Infomant is a good guess - when money and drugs are involved some of it is real enough for somebody to get busted (they accuse the guy to have dealt 1kg of mixed narcotics himself). They have probably been on the owner himself for a long period of time.

They also accuse him of hiring an assassin to eliminate somebody "who was threatening to release the identities of thousands of users or the site"...

Re:Tor compromised (0)

girlintraining (1395911) | about a year ago | (#45016033)

Silk Road practiced the use of Tor as well as anyone could have.

No, they didn't. They pretty much put a flare up saying where the servers were, ran unpatched servers that got infected with malware and compromised its users, and ... ready for the big surprise? ... The government then used the locally-installed malware to communicate outside Tor, after which it was pretty trivial to match realworld identities to bitcoin wallets and to forum posts and purchases through Silk Road.

Tor wasn't compromised; The systems running on top of it were. You can't blame the protocol for the stupid decisions of the people using it... this is like saying SSL was compromised when someone gets arrested for posting child porn on Facebook. "But... it was secured!" Yeah... and there's your picture, name, and address.

Tor anonymizes your IP address. It doesn't keep you from leaking information out via other means... like I don't know, say, making drug purchases online? They had to be shipped somewhere and you can't Tor your mailing address.

Billion ... with a B (3, Funny)

Rafał Łoś (3361257) | about a year ago | (#45015523)

So this begs the question - Are we winning the war on drugs yet?

Re: Billion ... with a B (2)

jsidhu (212098) | about a year ago | (#45015557)

What's winning got to do with it?

Re: Billion ... with a B (0)

Anonymous Coward | about a year ago | (#45015927)

What's winning got to do with it?

Why don't you ask the drug agencies fighting that war. They're the one who keep beating that "winning" drum, but I think it's rather obvious as to why they do it. They need to convince us they're winning in order to justify their very existence. Even they must know a portion of their job justification is complete and utter bullshit supported by failed policy.

Of course, justifying expenses would also imply that the American people actually have a say in tax spending anymore. We don't, hence the reason the war rages on.

The largest issue with the war on drugs is including cannabis. It's insane what we spend out of the overall drug war budget trying to eradicate a plant from the earth while filling privately funded prisons with "criminals". They also keep cannabis illegal in order to ensure that alcohol and prescription drug addicts don't convert to cannabis use and affect profits for those massive industries.

Re: Billion ... with a B (0)

Anonymous Coward | about a year ago | (#45015989)

No, they need to convince us that the drugs are a terrible and frightful enemy that only they are capable of defending us from, they don't need to win, winning would actually eliminate their jobs.

They do a much better job if they just make us think they can maybe win, if we keep pouring money down their drains.

Re:Billion ... with a B (1)

Threni (635302) | about a year ago | (#45015967)

No it doesn't.

Re:Billion ... with a B (2)

TheP4st (1164315) | about a year ago | (#45016047)

No it does not beg the question "Are we winning the war on drugs yet?". The war on drugs cannot be won as long as there exist people creating demand for illicit products since these very same people will find a way to obtain it. The only way to win that war is by exterminating humanity as a species and that would be the definitive Pyrrhic victory.

Drugs are bad. (-1)

Anonymous Coward | about a year ago | (#45015543)

You should be happy.

I mine bitcoin and... (0)

Anonymous Coward | about a year ago | (#45015545)

...I am absolutely fine with this.

The Private Federal Reserve... (0)

Anonymous Coward | about a year ago | (#45015555)

...wins again!

Wait what? (0)

Anonymous Coward | about a year ago | (#45015573)

You're telling me I can't run an online marketplace for illegal items on the internet? Next thing you know I won't even be able to post naked pics of my ex in revenge for dumping me.

Didn't expect this... (5, Interesting)

SgtKeeling (717065) | about a year ago | (#45015577)

I just finished reading Gwern's guide to the Silk Road the other evening. If you weren't familiar with the goods for sale, or how it worked, this is a great article: http://www.gwern.net/Silk%20Road [gwern.net]

Long Overdue (0, Troll)

Anonymous Coward | about a year ago | (#45015581)

The only surprise here is why this arrest and seizure took so long. I hope all these evildoers and drug pushers realize now that they can't hide behind anonymity and the authorities can prosecute and punish these dastardly bastards.

Congrats to the FBI, DEA, and government for taking this hooligan down.

Re:Long Overdue (3, Informative)

Anonymous Coward | about a year ago | (#45015693)

The only surprise here is why this arrest and seizure took so long. I hope all these evildoers and drug pushers realize now that they can't hide behind anonymity and the authorities can prosecute and punish these dastardly bastards.

Congrats to the FBI, DEA, and government for taking this hooligan down.

Sounds like you need a mushroom session.

Re:Long Overdue (2, Insightful)

Anonymous Coward | about a year ago | (#45015703)

I hope all these evildoers and drug pushers

capitalism is evil. selling a product to a willing and interested buyer is evil.

"Drug dealers don’t really sell drugs. Drug dealers offer drugs. I’m 30 years old. Ain’t nobody ever sold me drugs. Ain’t nobody ever sold nobody in this room some drugs. Was you ever in your life not thinking about getting high and somebody sold you some fucking drugs. Hell, no!

Drug dealers offer, “Hey man, You want some smoke? You want some smoke?” If you say “no,” that’s it. Now Jehovah’s Witnesses on the other hand. Shit. Yo man, drug dealers don’t sell drugs. Drugs sell themselves. It’s crack. It’s not an encyclopedia. It’s not a fucking vacuum cleaner. You don’t really gotta try to sell crack, OK? I’ve never heard a crack dealer go, “Man, how am I going to get rid of all this crack? It’s just piled up in my house.”"
- Chris Rock on drugs

Re:Long Overdue (0)

bunratty (545641) | about a year ago | (#45015769)

I see your brainwashing has been 100% successful. Congratulations on having no ability to think for yourself. You earned it!

Re:Long Overdue (2)

inking (2869053) | about a year ago | (#45015905)

Just because you disagree with him on the legality of drug trafficing doesn't mean that he is brainwashed.

Re: Long Overdue (0)

Anonymous Coward | about a year ago | (#45016035)

not advocating for either side here, but how is your reaction any different from his? from the outside i see two people reacting with the same level of blindness in opposite directions

Re:Long Overdue (0)

Anonymous Coward | about a year ago | (#45015821)

Good goy.

Re:Long Overdue (3, Insightful)

Tokolosh (1256448) | about a year ago | (#45015875)

The object of this Essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion. That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinion of others, to do so would be wise, or even right... The only part of the conduct of anyone, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself, his independence is, of right, absolute. Over himself, over his own body and mind, the individual is sovereign.

— John Stuart Mill,

Re:Long Overdue (0)

Anonymous Coward | about a year ago | (#45015899)

Couldn't agree more. We've seen so many times how small business has been destroyed by large corporations, so let me re-iterate:

Support your local dealer!

strange summary FTA (1)

schneidafunk (795759) | about a year ago | (#45015583)

"U.S. law enforcement authorities raided an Internet site"
How'd they get in the front door?

Re:strange summary FTA (5, Funny)

Anonymous Coward | about a year ago | (#45015731)

They didn't. They used their backdoor.

Re:strange summary FTA (0)

Anonymous Coward | about a year ago | (#45015919)

They didn't. They used their backdoor.

Giggidy

Re:strange summary FTA (1)

bobbied (2522392) | about a year ago | (#45015959)

Well played sir... LOL

N$A now player in US domestic war on drugs (2, Insightful)

Anonymous Coward | about a year ago | (#45015605)

But they only spy on foreign terrists. And blacks.

There goes the value of Bitcoin. (1)

gallondr00nk (868673) | about a year ago | (#45015609)

It'll drop like a stone.

Only kidding, I imagine a lot of the smarter users moved on the very second the site was mentioned in the media./p

Re:There goes the value of Bitcoin. (2)

thevirtualcat (1071504) | about a year ago | (#45015799)

It's an excellent opportunity to see what happens when 26,000 BTC suddenly vanish from existence.

Re:There goes the value of Bitcoin. (2)

Dunbal (464142) | about a year ago | (#45015945)

Vanish? I'm sure they'll be exchanged for cash on an exchange, and the cash will be kept by the Feds and spent as they please. Because the law says that any cash they seize when there is suspicion (not proof - suspicion!) of drugs/money laundering is theirs to do with as they please.

Re:There goes the value of Bitcoin. (0)

Anonymous Coward | about a year ago | (#45015871)

You kidding? That's when the value initially spiked! Nobody gave a fuck about buttcoin until the media picked up on SR, but after that it went from 0.05 USD to 35.00 USD in three weeks.

Bitcoin: a currency backed by COMEDY GOLD

Re:There goes the value of Bitcoin. (1)

Agent ME (1411269) | about a year ago | (#45015975)

Just because all SR users use Bitcoin doesn't mean all or even a significant amount of Bitcoin users use SR.

Re:There goes the value of Bitcoin. (0)

Anonymous Coward | about a year ago | (#45016019)

The way has just been opened for some teenagers from some country without US extradition to make their own new version of the site. Someone will use their OLPC to create it by the end of the month. Millions of dollars looks real good when you are living in some backwater village.

Might not be via TOR (4, Insightful)

EMG at MU (1194965) | about a year ago | (#45015615)

This guy had to convert some of the bitcoin into real $ at some point, he had to eat and live somewhere right? Money laundering investigations might have been the vector through which he was compromised instead of a computer based trace.

Re:Might not be via TOR (1)

Drachs (29694) | about a year ago | (#45015739)

They probably traced the bitcoin transactions he used to extract good old American cash.

https://en.bitcoin.it/wiki/Anonymity

Re:Might not be via TOR (4, Insightful)

stewsters (1406737) | about a year ago | (#45015745)

At least, that's what the "Parallel Construction" will say. Remember that TOR was released by the NSA. Perhaps it was released because they believed that only they had enough of a surveillance budget to monitor all the messages in route.

Re:Might not be via TOR (0)

Anonymous Coward | about a year ago | (#45015933)

The first version of Tor was published by researchers funded by the US Naval Research Laboratory, not the NSA. Onion routing had been researched by DARPA before that.

Federal Reserve Notes Used to Sell Illicit Goods (-1, Offtopic)

cervesaebraciator (2352888) | about a year ago | (#45015637)

Can we arrest Ben Bernanke?

Re:Federal Reserve Notes Used to Sell Illicit Good (1)

Nidi62 (1525137) | about a year ago | (#45015721)

Can we arrest Ben Bernanke?

If he ran a site that allowed the sale of illicit goods, then sure. Your argument would be stronger if the story were about the arrest of they guy that created bitcoins, and not a guy who ran a website where you can use bitcoins to buy drugs and other illegal goods.

Re:Federal Reserve Notes Used to Sell Illicit Good (1)

cervesaebraciator (2352888) | about a year ago | (#45016015)

Indeed you're correct. My purpose, however, was merely to make a smart-ass remark about the irrelevance of bitcoins to this case. The bitcoins are just a tool, just as federal reserve notes are, but they'll nevertheless be part of the cyber-scare case. Even so, let me know if you come up with an excuse to arrest Bernanke.

Re:Federal Reserve Notes Used to Sell Illicit Good (0)

PPH (736903) | about a year ago | (#45016021)

Right. Bitcoin, MtGox et al did nothing wrong. And (based on my only having scanned TFS) the Feds did nothing with the Bitcoin infrastructure either. When you arrest a drug dealer, you seize all the money found in the raid.

This could have an interesting implication for Bitcoin. We all know how deeply in love the authorities are with seizing the proceeds of criminal activity and utilizing said proceeds for themselves. So if they exchange Btc for USD, they are legitimizing Bitcoin as a currency. If, on the other hand, they live by their claims that Btc is merely an intermediary for money laundering, then I'd expect them to delete the seized wallet. In much the same way that they destroy illegal contraband. Lets see if the gov't can pass up US$3.6m. Particularly now that their primary funding source has dried up.

Well now. (1, Offtopic)

Black Parrot (19622) | about a year ago | (#45015639)

That's an odd way for the editors to keep bitcoin in the headlines.

Got nailed by USING Silk Road, not RUNNING it (4, Informative)

Anonymous Coward | about a year ago | (#45015671)

According to the complaint, they tracked him by intercepting fake id's he sent to his actual home address. Whether they breached TOR and just set him up, or just hit the stupid mistake of a lifetime by him using his actual address I doubt we will ever know. In any case, they traced things back to him in the end it seems.

Re:Got nailed by USING Silk Road, not RUNNING it (0)

Anonymous Coward | about a year ago | (#45015993)

Where else are you going to have things delivered so you can pick them up?

Re:Got nailed by USING Silk Road, not RUNNING it (0)

Anonymous Coward | about a year ago | (#45016017)

Actually, it sounds like he was just sloppy in keeping his identities and email addresses separate. Seriously amateur.
http://www1.icsi.berkeley.edu/~nweaver/UlbrichtCriminalComplaint.pdf [berkeley.edu]

LOL (1)

sexconker (1179573) | about a year ago | (#45015695)

How: Anyone can get on Tor, get on Silk Road, and watch what's going on. Anonymity doesn't do shit when half the nodes are run by three letter acronyms and you end up selling BTC on MtGox for USD.

The only questions I have have are about the seizure and the hacking.

How do you seize BTC? Surely they had an encrypted wallet and copious backups, right? The feds can take your wallet and do exactly nothing with it, while you could then reproduce your wallet from one of your backups and have instant access to your BTC.

Why was he hit with a hacking charge? Because he did things with a computer?

Re:LOL (1)

mederbil (1756400) | about a year ago | (#45015797)

The feds could have transferred his BTC to another wallet. Your backups are of no use when the blockchain insists that those Bitcoins don't belong to you anymore. Correct me if my understanding of Bitcoin is wrong, please.

As for the hacking charge, I'm not sure - but you can read the court docs here - http://www1.icsi.berkeley.edu.nyud.net/~nweaver/UlbrichtCriminalComplaint.pdf [nyud.net] . I still need to go through this myself so I won't comment on why there is a hacking charge.

Re:LOL (0)

Anonymous Coward | about a year ago | (#45015851)

Maybe read the complaint. Good idea, eh?

And you seize BTC by also arresting the only person who had access to the wallet, and the backups. :0

So how long... (5, Funny)

Em Adespoton (792954) | about a year ago | (#45015747)

So how long will it be before the Silk Road is back up and running under the management of the Dread Pirate Roberts? I presume he had a cabin boy prior to being arrested... or was that how he got nabbed?

Re:So how long... (2)

bobbied (2522392) | about a year ago | (#45016037)

Inconceivable!

Jumping to conclusions (1)

Anonymous Coward | about a year ago | (#45015757)

Roberts got busted when the RCMP confiscated fake identity documents in the mail and reported to the FBI.

Expect to see bitcoin lose half its value (4, Insightful)

Anonymous Coward | about a year ago | (#45015763)

It's an open secret that Silk Road was THE primary driver of demand for bitcoin in the beginning. Adoption by the Silk Road transformed bitcoin from a technical curiosity to a real currency backed by a valuable physical commodity (drugs).

Bitcoin has a life of its own now. Even Wall Street is involved. But without Silk Road, 99% of slashdot would have never heard of bitcoin. And the end of Silk Road is certain to impact bitcoin in a big way, even today.

Re:Expect to see bitcoin lose half its value (2)

Ultra64 (318705) | about a year ago | (#45016051)

Expect to see bitcoin lose half its value

Sweet. When that happens it will be time to buy.

Ya, Sure. (4, Funny)

fahrbot-bot (874524) | about a year ago | (#45015771)

Everyone knows the real Dread Pirate Roberts [wikipedia.org] has been retired +15 years in Patagonia ... But, of course, no one would care about arresting the Dread Pirate Ulbricht.

/redundant

Re:Ya, Sure. (1)

bobbied (2522392) | about a year ago | (#45016077)

Inconceivable! Retired 15 years?!!

mo3 3own (-1)

Anonymous Coward | about a year ago | (#45015841)

May be huRting

Nothing remains secret on the internet (1)

tomkost (944194) | about a year ago | (#45015877)

Every system devised by men can be broken by other men with the right funding. If your system maintains any records like posting of items for sale, that's easy for someone to grab at some point. Once they determine the physical locations and gain access it's all over. Even if the system only sends messages which are not stored, those can be intercepted eventually given enough work or again the physical access to the servers.

$3.6 Million Bitcoin Seized (3, Interesting)

CanadianRealist (1258974) | about a year ago | (#45015903)

Will the government try to redeem these bitcoins? Wouldn't that be like saying that they accept that bitcoin is valid? (Of course they could be hypocrites and say that bitcoin is completely invalid and redeem them anyways.)

It would be neat if all the seized bitcoins could be identified and recorded as being worthless now.

Surprise? (0)

dysmal (3361085) | about a year ago | (#45015921)

Is anyone really surprised? When something like this is constantly referenced in the news media, it's only a matter of time before they get shut down. Demonoid, Astraweb, Suprnova, Napster. As soon as something is referenced in the news media, start the count down.

It had to happen (1)

Karmashock (2415832) | about a year ago | (#45015929)

We can't have things like this... at the same time... I do support the legalization of drugs and I do feel we need more economic freedom.

That said... you can't have people buying hit men on the dark web.

Hold on just a god damn minute (1)

Crimey McBiggles (705157) | about a year ago | (#45015937)

Our federal government shut down yesterday. How the hell do they have the resources to fight the "war on drugs" when they can't even keep the national parks open?!?!

Well... (1)

sociocapitalist (2471722) | about a year ago | (#45015971)

Where there is demand, there will be supply.

Even if Roberts goes down with the sinking of the Silk Road site, I give it a week before there's some replacement site up and running.

NSA = RACIST! (-1)

Anonymous Coward | about a year ago | (#45015973)

Since blacks are a major consumer of drugs. Does any one think this is racist?

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