The United States Federal Bureau of Investigation (FBI) has announced that it has arrested a 26-year-old man in San Francisco for allegedly owning and operating underground online marketplace Silk Road 2.0, which it shuttered on November 5.
The FBI said in a statement that Blake Benthall, of San Francisco, California, had been charged with one count of conspiring to commit narcotics trafficking; one count of conspiring to commit computer hacking; one count of conspiring to traffic in fraudulent identification documents; and one count of money laundering conspiracy.
Benthall, known as "Defcon", according to the FBI, was arrested on November 5 in San Francisco, and is appearing on Thursday in San Francisco Federal Court before Magistrate Judge Jacqueline Scott Corley.
The arrest comes just over a year after US federal agentsthe original Silk Road website — which used the privacy-protecting Tor network and Bitcoin digital currency to shield the identities of buyers and sellers around the world — and arrested its alleged operator, Ross William Ulbricht, also known as "Dread Pirate Roberts".
"As alleged, Blake Benthall attempted to resurrect Silk Road, a secret website that law enforcement seized last year, by running Silk Road 2.0, a nearly identical criminal enterprise," said Manhattan US Attorney Preet Bharara in a statement. "Let's be clear: This Silk Road, in whatever form, is the road to prison.
"Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don't get tired," he said.
According to the authorities' official complaint, unsealed on November 6 in Manhattan Federal Court:
Since about December 2013, Benthall, aka, "Defcon", has secretly owned and operated an underground website known as "Silk Road 2.0" — one of the most extensive, sophisticated, and widely used criminal marketplaces on the internet today. The website has operated on the "Tor" network, a special network of computers on the internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the network's users.
Since its launch in November 2013, Silk Road 2.0 has been used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as to launder millions of dollars generated by these unlawful transactions. As of September 2014, Silk Road 2.0 was generating sales of at least approximately $8 million per month, and had approximately 150,000 active users.
The FBI said that Silk Road 2.0 was launched in November 2013, approximately five weeks after the government shut down the original Silk Road and arrested Ulbricht.
The US government argues that the original Silk Road website had been designed to enable people anywhere in the world to buy and sell illegal drugs and other illegal goods and services anonymously and beyond the reach of law enforcement.
The FBI said:
In particular, like its predecessor, Silk Road 2.0 operated exclusively on the "Tor" network and required all transactions to be paid for in Bitcoins in order to preserve its users' anonymity and evade detection by law enforcement.
Likewise, the offerings on Silk Road 2.0 consisted overwhelmingly of illegal drugs, which were openly advertised as such on the site. As of October 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, 1,783 listings for "Psychedelics", 1,697 listings for "Ecstasy", 1,707 listings for "Cannabis", and 379 listings for "Opioids".
Besides illegal narcotics, other illicit goods and services were openly advertised for sale on Silk Road 2.0 as well, including fraudulent identification documents and computer-hacking tools and services.
FBI assistant director-in-charge George Venizelos suggested that the shuttering of the original Silk Road site and the arrest of Ulbricht should have served as a warning to Benthall.
"Benthall should have known that those who hide behind the keyboard will ultimately be found. 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," said Venizelos.
The FBI said that the government's investigation was conducted jointly by the FBI and Homeland Security Investigations (HSI), with an HSI agent acting in an undercover capacity and successfully infiltrating the support staff involved in the administration of the Silk Road 2.0 website.
The agent was given access to private, restricted areas of the site reserved for Benthall and his administrative staff. By doing so, the agent was able to interact directly with Benthall throughout his operation of the website.