FBI arrests Silk Road drugs site suspect
- 2 October 2013
- From the section Technology
The FBI has announced the arrest of the suspected operator of the Silk Road - a clandestine online marketplace for drugs and other illegal items.
A spokeswoman said that Ross William Ulbricht was arrested "without incident" by its agents at a public library in San Francisco on Tuesday.
She added he had been charged with conspiracy to traffic narcotics.
The FBI said it has also seized approximately $3.6m (£2.2m) worth of bitcoins - a virtual currency.
The agency described it as the biggest Bitcoin seizure to date.
The Silk Road is now offline - those trying to access it are presented with a notice saying the site has been seized. Users had previously been able to access the service through Tor - an anonymous web browsing system that requires special software.
Mr Ulbricht made an initial appearance at San Francisco federal court where a bail hearing was set for Friday.
In addition to the narcotics trafficking allegation he also faces charges of computer hacking conspiracy and money laundering conspiracy, according to court filings.
"From in or about January 2011, up to and including September 2013, the Silk Road Hidden Website... has served as an online marketplace where illegal drugs and other illicit goods and services have been regularly bought and sold by the site's users," state court papers filed in the Southern District of New York.
"The complainant further alleges, in part, that the Silk Road Hidden Website is designed to facilitate the illicit commerce hosted on the site by providing anonymity to its users, by operating on what is known as The Onion Router or Tor network... and by requiring all transactions to be paid in bitcoins, an electronic currency designed to be as anonymous as cash."
It adds that Mr Ulbricht - who is alleged to have gone by the pseudonym Dread Pirate Roberts - had generated sales of more than $1.2bn via the Silk Road.
The FBI believes he took cuts ranging from between 8% to 15% and was subsequently involved in a money laundering operation to hide the activity.
A second document alleges that private communications recovered from the Silk Road's computer server suggested the suspect had been willing to pursue violent means to defend his interests.
It said that messages sent in March and April indicated he had "solicited a murder-for-hire" of a Canadian Silk Road user nicknamed FriendlyChemist who had tried to extort money by threatening to release the identities of thousands of the site's users.
Subsequent messages indicated he had been sent a photograph of the victim after paying $150,000 to have the blackmailer killed.
"I've received the picture and deleted it. Thank you again for your swift action," Mr Ulbricht is alleged to have written to an assassin.
However, the court documents note that Canadian law enforcers have said there was no record of a homicide taking place in White Rock, British Columbia at the time.
The court documents described Mr Ulbricht, 29, as a former physics student at the University of Texas, who had gone on to study at the University of Pennsylvania between 2006 and 2010.
It was here, according to Mr Ulbricht's LinkedIn profile, as quoted by court documents, that his "'goals' subsequently 'shifted'".
He wrote on the social network that he had wanted to "give people a first-hand experience of what it would be like to live in a world without the systemic use of force" by "institutions and governments".
Authorities said he took to online forums to publicise Silk Road as a potential marketplace for drugs back in January 2011.
In one such message, a user believed to be Mr Ulbricht allegedly said: "Has anyone seen Silk Road yet? It's kind of like an anonymous Amazon.com."
Investigators said he used the same channels months later to recruit help - starting with a search for an "IT pro in the Bitcoin community".
'Shock and disbelief'
Visitors to the discussion site Reddit have reacted to the news on a forum dedicated to Silk Road.
"I'm still in a bit of shock and disbelief," wrote one.
Others expressed anger that money they said they had deposited with the site would now be seized.
Some speculated that copycat sites were likely to appear soon.