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Explainer: What's with the Feds Shutting Down Silk Road
Scott Lucas | Photo: Courtesy the FBI | October 2, 2013
What just happened to the illicit online drug market and what does it mean?
What just happened? The FBI arrested the central figure behind Silk Road, an illicit online marketplace, and seized millions of dollars in bitcoin.
What was the Silk Road? Sort of an eBay for illicit material, Silk Road was a site that operated on the Deep Web in which users could pay for drugs like LSD, cocaine, and heroin using bitcoin (You could also buy legal substances, like books and cigarettes, too). The site, run by a user known as the Dread Pirate Roberts, real name Ross William Ulbricht, espoused techno-libertarian ideals.
What happens to bitcoin? In addition to the arrest, the FBI seized more than $3.6 milion in bitcoin. The online currency, which had been hovering around $140 a bitcoin, has dropped significantly on the Mt. Gox exchange, trading at a low of $120.80 this morning. Silk Raod had been a major site of bitcoin transactions, accounting for up to $1.2 billion in sales.
What happens to Dread Pirate Roberts? Who is he, anyway? Ulbricht, who was arrested at the Glen Park Library, faces one count of narcotics trafficking conspiracy, one of computer hacking, and one of money laundering, The charges also allege that Roberts solicited another Silk Road user to murder another user who threatened to reveal the identities of participants. According to the charges, Roberts is 29 years old, graduated from the University of Texas with a Bachelor of Science degree in Physics in 2006. From 2006 to 2010, he attended graduate school at the University of Pennsylvania School of Materials Science and Engineering.
How long was this investigation going on? At least since January of 2011. Investigators received a complete copy, located in an unnamed foreign country, of their server on July 23rd of 2013.
What is the Deep Web? That's the informal name for sites that don't index themselves, so they can't be accessed through normal browsers. You have to use software like Tor to access them (it's not that hard, but you have to know what you are doing).
Where do I buy drugs now? Short of Hamsterdam, we hear that the lower part of Turk Street is a pretty good bet. Careful about those buy busts over in the Haight, though.
Didn't Thomas Pynchon predict all of this? Trick question. Pynchon has predicted every major event for the last fifty years or so. But yes, the whole story does bear a certain resemblance to Pynchon's latest novel, Bleeding Edge, much of which takes place in the Deep Web.