Guy Accused Of Operating Silk Road 2.0 Arrested In SF... Just Like The Last One

from the yes,-the-FBI-can-track-you-down dept

This morning, the FBI excitedly announced that they had arrested Blake Benthall as the alleged operator of Silk Road 2.0, the replacement to the original Silk Road, which went down when the feds arrested Ross Ulbricht 13 months ago. As with Ulbricht, Benthall is a young tech-savvy guy living in San Francisco. Assuming he was actually running Silk Road 2.0, you'd think he'd have figured out that staying in the US while doing so is a serious occupational hazard. You can read the full complaint, but it again looks like (just like Ulbricht) he was somewhat sloppy in covering his own tracks. It didn't help that he apparently allowed an undercover FBI agent to become pretty high up as a "support" staffer, giving him access to insider forums.

The complaint (as with Ulbricht's) is an interesting read, though it will be interesting to see what other information comes out of the next few months. It's not clear how the FBI found the server (in a foreign country) and had it imaged. That raised some questions in Ulbricht's case, and will likely do the same here. Benthall bounced around a variety of jobs, including for RPX (a patent aggregator that has tried to position itself as the "not evil" version of Intellectual Ventures) and SpaceX. In fact, it appears that when Benthall took over Silk Road 2.0 from its original creator, he was employed by SpaceX at that time. The criminal complaint also notes that at some point he bought a Tesla with bitcoins, though he appears to have done so about a month after someone else made news for doing the same.

As for the actual charges, the specifics here matter. It still seems like a bit of a reach that merely running a marketplace online should make you liable for people doing illegal stuff in that marketplace, but things like Section 230 don't protect criminal activity. The complaint also has money laundering and CFAA hacking charges in there as well, though the details are still all a bit murky.

It appears that this takedown is part of a larger global effort to take down a bunch of "darknet" drug operators and websites, with Silk Road 2.0 just being the shiny one that many in the public had already heard about.

While it's reasonable to argue that this is criminal activity and should be taken down, others have suggested that by merely taking down online darkmarkets like Silk Road and Silk Road 2.0, the government is actually making the world more dangerous. Indeed, a study released a few months ago argued that Silk Road greatly reduced violence in the drug trade market. One could argue that keeping the drug market violent reduces incentives for people to get involved in it, but there is also the collateral damage that a violent drug market creates on third parties and innocent bystanders.

Either way, I doubt that this will stop Silk Road 3.0 (or something similar) from springing up before too long. And whether or not the FBI gets whoever runs that, this will be a continuous cat and mouse game, and I imagine that future darkmarkets will get more and more secure.

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    identicon
    Jim, 6 Nov 2014 @ 11:51am

    Elon Musk and tesla connections

    Allegedly Blake Benthall is an employee of Elon Musk and some of the laundered money was used to buy a Tesla. Elon Musk is on record making fraudulent claims about Tesla's batteries and other things. Elon Musk and his corporate shills have falsely claimed that Tesla batteries are non-toxic, nonhazardous, environmentally friendly & landfill safe.

    According to TESLA, the high voltage battery (lithium-ion battery) can release toxic vapors; including sulfuric acid, oxides of carbon, nickel, aluminum, lithium, copper, & cobalt.

    Tesla fan boys are shills that spams slander, lies, FUD, hate, and ignorance. Tesla fan boys can't handle the truth. Tesla fan boys fear and hate truth.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Nov 2014 @ 12:00pm

      Re: Elon Musk and tesla connections

      Tesla fan boys are shills that spams slander, lies, FUD, hate, and ignorance. Tesla fan boys can't handle the truth. Tesla fan boys fear and hate truth.

      Only a Sith deals in absolutes.

      I also like how you take the opportunity to use this as a soapbox for your own beliefs rather tan discussed the article and the points it makes, effectively making your entire point moot. Fail commenting 101.

      reply to this | link to this | view in chronology ]

    • identicon
      RD, 6 Nov 2014 @ 12:07pm

      Re: Elon Musk and tesla connections

      reported because fucking off-topic FailRant.

      reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 6 Nov 2014 @ 12:11pm

      Re: Elon Musk and tesla connections

      Good lord, you really stretched to try to justify this off-topic rant, didn't you?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Nov 2014 @ 1:08pm

      Re: Elon Musk and tesla connections

      Did someone forget their lithium today?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Nov 2014 @ 1:55pm

      Re: Elon Musk and tesla connections

      Will somebody please beam Jim up.

      reply to this | link to this | view in chronology ]

  • icon
    anti-antidirt (profile), 6 Nov 2014 @ 12:25pm

    Cocaine

    Now I'll wait until Silk Road 3.0 comes out to buy my brick of cocaine for my upcoming bottomless-party.

    reply to this | link to this | view in chronology ]

  • icon
    ChurchHatesTucker (profile), 6 Nov 2014 @ 12:31pm

    Meh

    Waiting for the revelation that the FBI set up Silk 2.0 and found some patsy to take the fall for it.

    reply to this | link to this | view in chronology ]

  • icon
    Stan (profile), 6 Nov 2014 @ 12:36pm

    Findind Silk Road owners

    In all probability, if someone has "bounced around a variety of jobs" and purchased a Tesla with Bitcoin, then the FBI will just assume that he is the latest Silk Road n.0 owner.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Nov 2014 @ 1:56am

      Re: Findind Silk Road owners

      Once forfeited, that Tesla, I think, will end up as a police pursuit car. The engine in the Model S has 691 horsepower, way more than Ford, Chevrolet, or Dodge police interceptors.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 12:56pm

    Attention prohibitionists, no matter what sort of bans you put on a product/service you will simply drive it underground to unscrupulous suppliers. This applies to drugs, guns and abortions.

    Eventually people need to realize the best way to deal with these problems is to decriminalize or legalize. And regulate to the extent of MITIGATING (but not eliminating, remember diminishing returns) risk of harm.

    reply to this | link to this | view in chronology ]

  • icon
    OldMugwump (profile), 6 Nov 2014 @ 1:12pm

    Two takeaways

    1) Staying anonymous while running this sort of thing is harder than it looks.

    2) While having open drug markets (like Silk Road 2) doubtless does reduce violence, it's still against the law.

    So although the FBI's actions cause more harm than good here, they are indeed doing their job. The problem is the drug war, not the police who enforce the (idiotic) laws.

    A policeman's job is to keep the peace and enforce the law, not to change the law.

    Unfortunately, given stupid laws, there is often a conflict between "keeping the peace" and "enforcing the law".

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 7 Nov 2014 @ 7:08am

      Re: Two takeaways

      "Staying anonymous while running this sort of thing is harder than it looks."

      True. Staying anonymous while doing anything at all is harder than it looks. It has always been that way, even before the internet.

      "The problem is the drug war, not the police who enforce the (idiotic) laws."

      This is spot on. However, I must confess that I am highly suspicious of people who willing enter into jobs where they know they will have ot perpetuate injustice even when they aren't the root cause of it.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Nov 2014 @ 2:10pm

        Re: Re: Two takeaways

        Not to Godwin but you know the thing about "just following orders". (Sadly that it is only an invalid excuse if your side loses. Just look at My Lai for an example.)

        reply to this | link to this | view in chronology ]

        • icon
          John Fenderson (profile), 8 Nov 2014 @ 11:25am

          Re: Re: Re: Two takeaways

          Indeed, which is why I am highly suspicious of such people.

          However, I have know a fair number of cops who fall into a different category: they are not intentionally doing bad things with the justification that they're "just following order," but instead they mistakenly believe that they are doing something that is ultimately for the good. In other words, they believe (whether they know it or not) that the ends justify the means.

          While I disagree with them and think that their stance is morally unsupportable, I find it hard to call these people "evil" or "bad". They are misguided.

          Reality rarely cleaves cleanly into two camps of "good guys" and "bad guys". That's another reason that I say I am "suspicious" without automatically going to condemnation.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 1:18pm

    I take it at face value that someone infiltrated Silk Road 2.0's inner circle, but it wouldn't surprise me to learn that illegal surveillance is what led them to Benthall in the first place. Parallel construction is now the first thing I think of in these kinds of cases.

    The bulk of Silk Road drug sales were apparently for prescription drugs. Pharma has a powerful lobby. What's a little illegal surveillance between friends?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 1:32pm

    Evidence gathering by the Feds is simple. Almost every modern website has a MySQL database "backend".

    The one flaw is that MySQL, itself, keeps no logs, so if you can break into the MySQL backend, you can bypass the normal user interface and the logs.

    So the Feds could have gotten into his server, to get the evidence they needed, and the operators of Silk Road and Silk Road would never know they were there.

    By breaking into the database backend, the Feds can avoid having to have a search warrant.

    reply to this | link to this | view in chronology ]

  • icon
    M. Alan Thomas II (profile), 6 Nov 2014 @ 1:54pm

    It didn't help that he apparently allowed an undercover FBI agent to become pretty high up as a "support" staffer, giving him access to insider forums.
    So all that Tor and encryption and everything else I have to assume that they had going on and they were done in by . . . traditional police work. Gee, who could have seen that coming? (Not James Comey, apparently.)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 1:59pm

    define a detectable amount? most of the paper money in the US has a detectable amount of narcotics present, I wouldn't be surprised if all involved are fbi agents sellers and buyers and the one guy who isn't is the mark.

    reply to this | link to this | view in chronology ]

  • icon
    Mike Shore (profile), 6 Nov 2014 @ 2:32pm

    We've seen this before

    The Man will never learn. At some point web sites will become less centralized and more immune to takedown, just like Napster and Kazaa.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 4:25pm

    As usual in federal prosecutions, this guy will face a trial in the opposite end of the country, where it will be much harder and more expensive to mount an effective defense. And where just saying you're from San Francisco could be an automatic strike against you.

    And he'll be offered a deal he can't refuse: plead guilty and accept a few years in jail, or go to court and face the possibility of basically a life sentence. All for the "crime" of hosting a harmless website.

    reply to this | link to this | view in chronology ]

  • icon
    aldestrawk (profile), 6 Nov 2014 @ 9:56pm

    This story brought up two interesting questions for me.

    1). He has been charged with conspiracy to aid and abet computer hacking. The charge is based on SR2 allowing vendors to sell password crackers, keyloggers, and remote access software. It is not illegal to possess any of those items, and they are sold on other websites. However, if a manufacturer or vendor advertises the illegal purposes these things can be used for, that vendor can be charged with a crime. Can Blake Benthall be held accountable for how the vendors at SR2 marketed their wares?

    2). I am not sure that the HSI undercover agent was instrumental in bringing down SR2 and Benthall. If he was instrumental it would have been in locating the server. As a member of the support staff did he have access to the server location or IP address? If he did then it is likely he discovered the location early on such as in January. However, the server was imaged in late May which was probably the time the server location was discovered.

    One possibility is that the de-anonymizing attack on Tor that started in late January and lasted till July 4th was a government operation intent on discovering the location of such Tor hidden services. The Tor group discovered this and removed some 115 relays that had been added as a group in late January. They also fixed an associated vulnerability. When that fix was announced at the end of July, Defcon moved the location of the servers. The new locations was also discovered but by then they already had Benthall's identity.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Nov 2014 @ 10:11pm

    have the bankers that swindled trillions out of taxpayers with their bailout be in charge of the next one and the feds will fall over themselves protecting it

    reply to this | link to this | view in chronology ]

  • identicon
    Annonimus, 6 Nov 2014 @ 11:38pm

    Illegal Wack-a-mole

    FBI agents are hardcore: they don't play the ordinary wack-a-mole for petty change, they play the illegal whack-a-mole for peoples lives.

    reply to this | link to this | view in chronology ]

  • icon
    Tony (profile), 10 Nov 2014 @ 7:21am

    Honeypot

    Anyone thinking this was found out a bit too quickly and easily?

    reply to this | link to this | view in chronology ]


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