The Department of Justice announced this morning that the man they believe to be the administrator of the Silk Road 2.0 website, Blake Benthall of San Francisco, CA, has been arrested and brought up on charges related to his administration and participation in the activities of the Silk Road 2.0 website. Silk Road 2.0, a darknet black market allowing consumers and vendors to trade in illicit substances, fake identification, and more was created only weeks after the shutdown of the original Silk Road by an individual known as the “Dread Pirate Roberts,” a moniker that had been previously used by the head of the first Silk Road website, a man alleged to be Ross Ulbricht who is currently awaiting trial after his arrest in October 2013. After Dread Pirate Roberts stepped down, a user known as “Defcon” took the reigns in December 2013.

 

Alleged SR2.0 Admin, Blake Benthall

Blake Benthall

Silk Road 2.0 is currently the 3rd largest darknet market, behind only Agora and Evolution. Silk Road 2.0 has been seized and taken offline, and the markets known as Alpaca, Blackmarket, BlueSky, Bungee54, Cloud Nine, flugsvamp, Hydra, OnionShop, OutLaw, Pandora, Travia, TorBazaar, and The Hub are offline and presumed seized as of this posting, with Travia, Hydra, and Cloud Nine confirmed as seized. Agora, the largest market, also went down for a time this morning, but it is unknown whether this is related to the seizures and arrests (see updates below). Two suspects have been arrested and a cache of drugs seized in Ireland as well, as part of a joint FBI/Europol operation codenamed “Onymous.”

 

Benthall was arrested yesterday in San Francisco and was brought before Magistrate Judge Jaqueline Scott Corley in the US District Court for the Northern District of California. The complaint details that Silk Road 2.0 was compromised by an infiltrator from the ICE’s Homeland Security Investigations unit, who joined the support staff of the website and was able to interact directly with Benthall. His identification seems to have been hastened by IP logs of access to one of Benthall’s email addresses obtained from Google, as well as by information regarding the conversion of a large amount of Bitcoin to USD and purchases made by Benthall in Bitcoin, including that of a Tesla Model S in January 2014. A footnote in the complaint also explains that the task force was able to match Benthall’s browser and OS configuration to that used by “Defcon” because he logged into the customer support interface without the use of Tor, which would have disguised that information.

 

In March of 2014, Benthall and friends started a crowdfunding platform for charity known as “NutFund,” created which seems to have gone quiet after its first funding campaign. Benthall’s Facebook lists him as a software developer for the private space exploration company SpaceX, and as a consultant for Blake Benthall Consulting. His profile also states him to be a former employee of RPX Corporation, a firm which protects its clients from patent trolls. Benthall’s Facebook and Instagram posts reveal him as an apparently accomplished musician. Posts from Benthall’s Twitter account make reference to large Bitcoin balances, the first Silk Road website, and more.

Picture tweeted by Benthall's neighbor

Benthall was arrested at home wearing a (now-ironic) “INTERNET BETTER” hoodie on November 5th. $100,000 cash was found in the home. Prosecutor Kathryn Haun, in a statement made in court, stated that Benthall admitted to all charges against him after having been read his Miranda rights. Benthall will return to court Friday before a likely transfer to New York, the jurisdiction in which the complaint was filed.

 

While the Department of Justice has announced their intention to continue their crusade against darknet drug markets, many commentators see these efforts as misguided or even harmful. David Decary-Hetu, a criminologist at the University of Lausanne and Judith Aldridge , a law professor at the University of Manchester argue in their paper that the Silk Road and other drug markets actually have the effect of reducing violence in the drug trade, thereby reducing violent crime. The proliferation of such markets has also allowed vendors to develop “brands” in the deep web, allowing them to gain trust as their reputation is judged based on the quality of their products, thereby reducing the risk to consumers of dangerously degraded products. Characteristically, the FBI has ignored the positive aspects of these markets, with FBI Assistant Director-in-Charge George Venizelos stating “The FBI worked with law enforcement partners here and abroad on this case and will continue to investigate and bring to prosecution those who seek to run similar black markets online.”

UPDATE 1: The market “Travia” has now been reported as officially seized, as well as the Cannibis Road deepweb forums. Benthall’s Reddit account has also been located.

UPDATE 2: Agora is now down once again. It is unclear at this time whether this is due to seizure or whether it was done as a precautionary measure.

UPDATE 3: Agora admins have confirmed that Agora is fine and that they are safe.

UPDATE 4: It seems that The Hub is okay, but everyone checking on them since the reports is causing a virtual DDOS.

UPDATE 5: Looks like Hydra and C9 may have been using bad BitWasp code? Not confirmed as of yet. Will look into it further. (see update 7)

UPDATE 6: The Hub’s forum is okay, but the site is still down. Added flugsvamp, Tor Bazaar, and Bungee54 to the list of sites taken down.

UPDATE 7 (11/7): C9’s admin has stated that they were not using BitWasp. Wired reports that a total of 414 .onion domains were seized, including not only markets but also money laundering websites, including Golden Nugget, Fast Cash, and Cash Flow. 17 have been arrested in total, though officials have not been forthcoming with details. But 414? Either they found a lot of centralized darknet hosting, or there’s something wrong with Tor. Worrisome.

P.S. – Here’s Jeffrey Tucker’s defense of the original Silk Road.