10 Silk Road Facts - WMNews Ep. 31
Drug trafficking, illegal weapons sales and crowd funded assassinations were all just a click away. But with the founder of this deep web emporium now facing life in jail, what's next for Silk Road? Welcome to WatchMojo News, the weekly series from http://www.WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we're counting down 10 crucial facts you should know about the modern day Silk Road.
#10: What Is the Silk Road? The Market Place
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Launched in February 2011, the modern Silk Road was a Tor-protected illegal drug emporium. It operated in the Dark Web from its inception until 2013, when the FBI took it down. According to the FBI, this online black market was created and run by criminal mastermind Ross William Ulbricht (ullbricked). He managed the platform by assuming the online pseudonym Dread Pirate Roberts. Operating within the Dark Web, which, in turn, is part of the Deep Web, the Silk Road was hence a part of the World Wide Web that is built on top of darknets. These are networks that require specific access and authorization, which made the platform extremely hard to get into. Users were able to anonymously and securely browse the Silk Road without fear that law officials would track their activities because the platform was protected by free software known as Tor. At the time of the service’s shutdown, it was estimated that it had earned over $1.2 billion in revenue and $80 million in commissions.
#9: What Is the Original Silk Road? The Trade
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The original Silk Road was a network of trade routes that spanned the Asian continent and linked the East to the West. It was active during the Han Dynasty of 206 BC until its disintegration in the 1450s. The Silk Road name comes from the voluminous and extremely profitable Chinese silk trade that existed at the time, which necessitated an extensive network. As a selection of routes that spanned over 4,000 miles, the Silk Road was credited with the expansion and development of civilizations in China, the Indian subcontinent, Persia, Europe, the Horn of Africa and Arabia. Along with silk, the route also included the trade of other products and helped spread art, religions, technologies, and even diseases. Meanwhile, its disintegration largely contributed to the development of alternative sea routes for Europe, and eventually the discovery of the Pacific Ocean.
#8: Who Created the Modern Silk Road? The Libertarian
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American Ross William Ulbricht has a Masters degree in Materials Science and Engineering. Before creating the Silk Road, Ulbricht had been the CEO of a bookstore named ‘Good Wagon Books.’ It was during this time that he discovered stock trading and Bitcoin, the digital cryptocurrency. As a libertarian, Ulbricht believed in freedom of choice and conceived the idea of creating “a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.” Good Wagon Books was closed in early 2011 and just a few weeks later, Silk Road went live.
#7: How Did It Flourish? The Dark Web
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The Silk Road was able to rapidly expand due to its Tor protection, as well as its basis within the Deep Web, and more specifically the Dark Web. As previously mentioned, the Dark Web is content in the World Wide Web that exists only in darknets. Darknets can encompass small or large networks, like Tor, Freenet and I2P. It is widely believed that the Dark Web is a virtual shelter for criminal activity, including, but not limited to child porn, illegal drugs and goods, weapons, and crowd funded assassinations and hitmen. The fact that Tor protected the Silk Road made it nearly impossible for government officials to track Ulbricht. Numerous scientists as well as members of the U.S. Naval Research Laboratory created Tor, which is a free software enabling anonymity, in the mid-1990s. It has since become a valuable tool for political activists, dissidents, whistleblowers and eventually criminals to communicate online without fear of reprisal.
#6: Was It Profitable? The Money Pot
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The Silk Road was an extremely profitable platform, and its transactions were semi-anonymous due to its exclusive use of Bitcoin. Often considered the first cryptocurrency, Bitcoin is a decentralized virtual currency that is created through the act of mining. This is an activity where computers execute difficult number-crunching tasks and mathematically generate newly created Bitcoins. At the time of its closure in 2013, the Silk Road had generated revenue of 9.5 million Bitcoins, equivalent to $1.2 billion using the Bitcoin exchange rate of the time. The platform involved over 145 thousand buyers and over 3,500 vendors with a total of over 1 million transactions. Furthermore, it has been estimated that if the company had been a legitimate startup, it would have been valued at around $2.4 billion.
#5: How Was the Silk Road Shut Down? The FBI
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In early 2011, Gawker, an online media company, published an article about Silk Road that generated massive publicity and the attention of U.S. federal officials. It was at that point that an investigative government task force named Marco Polo was assembled. It quickly became evident that tracking down the creator was crucial to shutting down the Silk Road, and so a manhunt for ‘Dread Pirate Roberts’ began. The investigation led to a series of deliberately low profile Silk Road seller arrests, as well as the interception of packages from the Silk Road. Eventually, authorities were able to identify the overseas hosting company that was used by the Silk Road, which allowed them to retrieve all of the website’s private messages. Finally, in October 2013, the Federal Bureau permanently shutdown the Silk Road.
#4: Who Was Arrested? The Creator
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At the beginning of October 2013, the FBI arrested Ross William Ulbricht in San Francisco. The information leading to the arrest involved the work of multiple factions of the United States government, including, the FBI, DEA, IRS, DHS, U.S. Secret Service, Bureau of Alcohol, Tobacco, Firearms and Explosives and even the U.S. Postal Inspection - all as part of the Marco Polo task force. Subsequently, and in a strange turn of events, both Carl Mark Force IV, a DEA agent and Shaun Bridges, a Secret Service agent were arrested in March of 2015. The two agents were charged with money laundering and wire fraud. While Force was additionally charged with theft of government property and conflict of interest, Bridges was accused of seizing over $800,000 of Silk Road Bitcoins and of transferring them to a personal account, rather than turning them over to the government. Meanwhile, not only is Force charged with taking hundreds of thousands of Bitcoins but also with working as a paid informant for Silk Road under a pseudonym.
#3: What Was Ulbricht’s Defense? The Trial
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Ross William Ulbricht’s trial began on January 13th, 2015 in Manhattan, New York. At the beginning of the trial, Ulbricht admitted to having created the platform, but asserted that he had given control of the company to other people shortly thereafter. His lawyers contended that the person behind the pseudonym ‘Dread Pirate Roberts’ was not Ulbricht, but Mark Karpelès (car-pelless), the former CEO of the Japanese Bitcoin exchange company, Mt. Gox, instead. Prosecutors further alleged that Ulbricht had hired assassins to murder several targets, including a former employee. But, these charges were never made formal. The trial has been considered a landmark as it’s one of the first times someone has been charged for building a website and the first time the government has extended the statute of money laundering to include digital currency.
#2: What Was the Sentence? The Verdict
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In February 2015, Ulbricht was convicted of seven charges by the jury, including drug trafficking, criminal enterprise, computer hacking and of money laundering. Then, on May 29th, 2015, despite his lawyers’ attempts to prove to the judge and jury that Ross William Ulbricht had not been in charge of the Silk Road leading up to his arrest, he was handed 5 sentences, including 2 for life imprisonment. Even with the arrests of two federal government agents on corruption charges in March, the judge has refused a re-trial for Ulbricht.
#1: Will the Silk Road Resurface Again? The Future
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When the Silk Road was shut down, it was the largest platform of its kind, as it had over 13,000 drug listings and accounted for over 70% of the online drug market. Yet, just a few months later in November 2013, Silk Road 2.0 launched, although it only lasted a little while before it was taken down. However, as of mid-2015, multiple websites offering the same ease of purchase and products as Silk Road continue to exist, such as Agora and Nucleus. While the harsh sentencing of Ross William Ulbricht was partly meant to serve as a deterrent to others hoping to get into the industry, it seems to have made little to no impact on the community – at least so far. Did these facts surprise you? To vote for which news story is covered next, head over to WatchMojo.com/suggest, and be sure to hit that subscribe button for more newsworthy top 10s.
