Underground Website Used for Black Market Drug Sales Bigger Than The Original, Report Says

Federal shut-down of Silk Road was only speed bump, report says.

April 30, 2014, 9:16 AM
PHOTO: This frame grab from the Silk Road website shows thumbnails for products allegedly available through the site.
This frame grab from the Silk Road website shows thumbnails for products allegedly available through the site. On Oct. 1, 2013, FBI agents arrested Ross William Ulbricht, who is accused of operating the secret website, which is believed to have brokered more than $1 billion in transactions for illegal drugs and services.
silkroaddrugs.org/AP Photo

April 30, 2014 — -- In September, the FBI arrested the man alleged to be running Silk Road, an underground website known as a hidden online haven for drug trafficking, and a federal judge shut down the site with a prominent notice declaring “this hidden site has been seized.”

The man who allegedly ran the site under the pseudonym Dread Pirate Roberts is in jail awaiting trial on a raft of federal drug trafficking and money laundering charges.

But Silk Road is not only back up and running – a new version is more vibrant than ever, according to a report published today (PDF) by the Digital Citizens Alliance, a coalition of consumers, businesses, and Internet experts focused on educating the public and policymakers about online threats.

“The online black market economy has done a complete somersault in the six months since the fall of the original Silk Road,” the watchdog group has found. “New players have arisen, including a second incarnation of ‘Dread Pirate Roberts’ and a revived Silk Road (which seems to be thriving, even after law enforcement arrested and charged some of the new site’s prominent figures) has replaced the original.”

Among the findings in the report are approximately 13,648 listings for drugs are now available on Silk Road compared to the 13,000 that were listed shortly before the FBI arrested alleged mastermind Ross Ulbricht and shut down the original site. And Silk Road and other “darknet” marketplaces continue to do steady business.

The “darknet” drug economy as a whole contains 75 percent more listings for drugs, according to the report, “Busted, But not Broken.”

A spokesman for the DEA declined to comment on the website’s resurgence.

Like the original Silk Road, the new site thrives on a dark underbelly of the internet often navigated by computer users with TOR, software that enables users to browse the Internet anonymously for purposes both legitimate and, in this case, illegitimate. According to federal court filings in the case against Ulbricht, the original site served as a marketplace where drug dealers are connected with buyers and have exchanged shipments of drugs for hundreds of millions of dollars-worth of Bitcoin, a type of online currency.

Nicolas Christin, a professor at Carnegie Mellon University, said the resurgence is evidence that the anonymous online marketplace for drugs is resilient.

“That just goes to show that people are still interested in partaking in this kind of activity, regardless of what happened to the original Silk Road,” Christin said.

Still, he said, attitudes towards the black market sites have changed somewhat, though not so much because of Ulbricht’s arrest or the threat of another law enforcement crack down. In the time since the FBI shut down the original Silk Road site there have been a number of instances where people were scammed into sending money for drugs, only to see the website disappear with the buyer’s money.

“What has been denting consumer confidence are some of the large scams on those marketplaces,” he said. “There is no longer a feeling of invincibility as there might have been during the heyday of the original Silk Road.”

Ulbricht's lawyer declined comment on the Silk Road resurgence. His client has pleaded not guilty.

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