07
Oct 13

Feds Arrest Alleged Top Silk Road Drug Seller

facebooktwittergoogle_plusredditpinterestlinkedinmail

Federal authorities last week arrested a Washington state man accused of being one of the most active and sought-after drug dealers on the online black market known as the “Silk Road.” Meanwhile, new details about the recent coordinated takedown of the Silk Road became public, as other former buyers and sellers on the fraud bazaar pondered who might be next and whether competing online drug markets will move in to fill the void.

NOD's feedback from Silk Road buyers, according to the government.

NOD’s feedback from Silk Road buyers, according to the government.

A complaint unsealed Oct. 2 by the U.S. District Court for the Western District of Washington at Seattle alleges that Steven Lloyd Sadler, 40, of Bellevue, Wash., used the nickname “NOD” on the Silk Road, and was among the “top one percent of sellers” on the Silk Road, selling high-quality cocaine, heroin and methamphetamine in small, individual-use amounts to hundreds of buyers around the world.

Investigators with the FBI and U.S. Post Office inspectors say they tracked dozens of packages containing drugs allegedly shipped by Sadler and a woman who was living with him at the time of his arrest. Authorities tied Sadler to the Silk Road after intercepting a package of cocaine and heroin destined for an Alaskan resident. That resident agreed to cooperate with authorities in the hopes of reducing his own sentence, and said he’d purchased the drugs from NOD via the Silk Road.

Agents in Seattle sought and were granted permission to place GPS tracking devices on Sadler’s car and that of his roommate, Jenna White, also charged in this case. Investigators allege that the tracking showed the two traveled to at least 38 post offices in the Seattle area during the surveillance period.

Interestingly, the investigators used the feedback on NOD’s Silk Road seller profile to get a sense of the volume of drugs he sold. Much like eBay sellers, merchants on the Silk Road are evaluated by previous buyers, who are encouraged to leave feedback about the quality of the seller’s goods and services. According to the government, NOD had 1,400 reviews for individual sales/purchases of small amounts of drugs, including: 2,269.5 grams of cocaine, 593 grams of heroin and 105 grams of meth. The complaint notes that these amounts don’t count sales going back more than five months prior to the investigation, when NOD first created his Silk Road vendor account.

Cryptome has published a copy of the complaint (PDF) against Sadler. A copy of Sadler’s case docket is here. NOD’s reputation on the Silk Road also was discussed for several months on this Reddit thread.

Many readers of last week’s story on the Silk Road takedown have been asking what is known about the locations of the Silk Road servers that were copied by the FBI. It’s still unclear how agents gained access to those servers, but a civil forfeiture complaint released by the Justice Department shows that they were aware of five, geographically dispersed servers that were supporting the Silk Road, either by directly hosting the site and/or hosting the Bitcoin wallets that the Silk Road maintains for buyers and sellers.

geomap2
Two of those servers were located in Iceland, one in Latvia, another in Romania, and apparently one in the United States. See the map above.

As if the subset of Bitcoin users who frequented the Silk Road already didn’t have enough to worry about, there are indications that the individual(s) responsible for creating a competing Tor-based drug market — SheepMarketplace — may have made some missteps that could make it easier for authorities to discover the true location of that fraud bazaar as well. Check out this Reddit thread for more on that.

Also, there are some indications that a Silk Road 2.0 is in the works, at least according to DailyGadgetry.com. If that doesn’t work out, perhaps would-be future Dread Pirate Robertses will turn to Bitwasp, a budding Github project which aims to provide open source code for setting up standalone markets using Bitcoin.

“I think what you’re going to see is that a lot of me-too communities spring up and get squished pretty quickly,” said Nicholas Weaver, a researcher at the International Computer Science Institute (ICSI) and at University of California San Diego. “Part of the reason why the Silk Road was so useful was that it was so popular, and a half dozen smaller markets could be far less efficient than these larger markets. But personally, I’m betting we’ll soon see a fair number of them.”

Finally, it seems a large number of Bitcoin users have been spending tiny fractions of their coinage to send messages to the FBI’s Bitcoin address on Blockchain. Some of the love letters to the FBI are amusing, such as, “All your Bitcoins are belong to us,” while others sound a defiant tone, including this one: “One star is born as another fades away. Which one will come next? is my favorite riddle.” Said a girl puffing rings in a dot, dot, dash haze. “No worry, No hurry. They can’t stop the signal.”

Update, Oct. 8, 2013, 10:30 a.m.: The BBC is reporting that four men have been arrested in the U.K. for alleged drug offenses on the Silk Road, and that more arrests are expected in the coming weeks. The BBC quotes the U.K. National Crime Agency as saying such sites would are a “key priority.”

Update, Oct. 8, 2013, 1:32 p.m.: This Swedish news site is reporting that two men from Helsingborg have been arrested on suspicion of transacting in marijuana via the Silk Road.

Update, Oct. 9, 2013, 9:32 a.m.: A previous version of this story incorrectly stated that one of the servers seized by U.S. authorities was in Switzerland. Closer examination of the data reveals that the server was actually at a bulletproof hosting provider called Voxility, in Bucharest, Romania.

Tags: , , , , , ,

99 comments

  1. > Many readers of last week’s story on the Silk Road takedown have been asking what is known about the locations of the Silk Road servers that were copied by the FBI.

    What do you think of my speculation that the Dataclub.biz IP is the SR forums? http://www.reddit.com/r/SilkRoad/comments/1nt4ji/does_anyone_else_find_it_really_weird_that_the_sr/cclsl5m

  2. You can tell I lead a shuttered life; but the news media lacked any reporting of online illegal drug trade – they only talked about pharmaceuticals. I tend to separate those two classification of drugs, whether they are illegal or not. Your article and the sudden media buzz of the “Silk road” are definitely news to me!

  3. George Tor-well

    The real message I take away from all this is the sheer amount of time, man-hours, and money wasted by the FBI and/or NSA to fight the horrible scourge of … someone selling heroin?!? Are there no violent crimes in the US anymore? How many actual crimes – homicides, rapes, assaults, robberies, whatever – could have been investigated in lieu of stopping a drug dealer?

    Damn. Notwithstanding the consensual nature of drug “crimes”, everyone needs to step back, and adopt a “who cares” attitude to drugs. Someone wants to use heroin or cocaine? Who cares. Someone else wants to sell Valium, mescaline, Viagra, or anything else? Who cares.

    Silk Road proved there are tens of thousands (hundreds of thousands?) of reasonably intelligent people, people who understood Bitcoin, Tor, PGP encryption, etc — who were perfectly responsible with their personal drug use. When people get into trouble with their own drug use, it usually relates less to the addictive nature of the substances than the legal/financial ramifications of using regularly.

    Law enforcement at all levels needs to leave people engaging in drug transactions the hell alone.

    • It’s all about points. Political points and quotas.

    • You don’t believe in public health?

      • What about tobacco and alcohol? What about people engaging in high risk sports? What about people working too hard and getting stress related illness? People make decisions all the time that can damage their health. Do we have the right to tell them what to do with their lives? And besides, studies have shown that the most “harmful” drugs to both society and a user’s health are the often the legal ones. Everything is back to front at the moment.

      • There is no such thing as “public” anything. You can stuff whatever you want inside of that term to make a case for pretty much anything. So no, people who understand first rules of thought and such don’t really subscribe to such ludicrous catch-all terminology. It’s a joke.

      • What about alcohol and cigarettes? They killed my father and brother. Why aren’t they illegal too?

    • And running ajagged course buying and selling drugs is norm?

      I am sure there is simply more to it than just buying a drug, sitting back and enjoying it.

      If that drug could talk about its travels, it would probably tell you how many people got shot either trying to steal some from the field, from the sellers or buyers. It would probably tell you what else was added into the drugs and how additionally unhealthy it is.

      Lets then add in the users, who may or may not have a position of trust. Not every one is level headed. Not everyone can control how much they use. Not everyone can afford their habits. Thats it when the “who cares” goes out the window. Thats when robberies, murders, jail time and busts happen.

      There is absolutely nothing wrong with drugs being sold where it is “legal”. Thats up to the person involved to travel there and enjoy that freedom.

      My main point is – its not a snap of the fingers and its in a palm of the hand type deal. Many people may have / probably have had major issues with the handling of drugs that aren’t necessarily the best stuff in the world.

      I am not going to beat a dead horse, but add in morals, ethics, social acceptance. The use of illeagl substances in the privacy of one’s own home doesn’t mean that its OK, unless in a state country, island or other location ( like a boat in international waters) where laws may allow for other avenues of entertainmant.

      Ohhhh Krebs. What about a Floating Crack House/ Pimped House / Gambling Casino ? Talk about the proprietorship raking people over the coals….. Drive in circles in open international water and enjoy. Until some submarine makes Titanic II.

      • Your entire post seems predicated on the [ridiculously fallacious and kind of childish] assumption that morality is created by the arbitrary fiat of bureaucrats with guns.

        Morality transcends the state. In point of fact, the state is usually the most immoral group of people within a society at any given point in time…

        • I don’t understand the jibberish ramblings, could you be not so hot headed and retort a decent come back?

          • Umm….

            By your post you are using the operating assumption that the state is capable of “creating” morality (i.e. within these arbitrary geographic lines, X is wrong because men with guns say so, but withing those geographic lines, X is okay because men with guns say so). If you find that concept, which you espouse, to be incoherent, join the club….

            All of the problems we have with drugs are the result of prohibition in the first place. Prohibition drives an addiction cost through the roof (80k per year for an average coke addiction), far above what an average person can earn, so they end up structuring their entire life around feeding it.

            Drugs are not, and never will be, an actual criminal problem. Drugs are a medical problem, and should have been treated as such from the very beginning. Just because there’s a consensus on using violence against people because they interact with certain inanimate objects does not make that consensus ethically right.

            What kind of ethics can be called ethical if they can’t apply equally, universally, and simultaneously to every individual?

            • I agree with your drift derekb – I think – what gets me, is politicians call themselves Christians, yet send drug users to the penitentiary like the Romans sent Christians to the lion’s den. It is a ridiculous way to treat the situation. I can see maybe the logic of arresting the big distributors; but even then – at what cost?

              If we decriminalized every drug on the market and simply started treating the addicts, we would be money ahead. let alone morally ahead. I just can’t stomach this fallacious “drug war”. All it has done his cause more hate and discontent, and civil decay. In Amsterdam, I read they are treating some of their last addicts – most drugs are not in the criminal law books there, I’m told.

              The sad thing is, these addicts are old hippies from America in the ’70s. They are the last of their local problem – I imagine they stopped allowing immigration of any further number of US addicts.

          • The fact that you can’t understand clear English when written above a 10th grade level explains your perspective on this issue. You’re on the wrong side of history, buddy.

    • Pablo Escobar Jr

      I agree with everything you saying .But a drugs .money .prostitution they all feed organize crime and as you know organize crime is not the most friendliest people in the world so it leads to violent crime .robberies exploitation and so on . See where im going with this .

      drug users — no problem Senior
      drug pushers – big problem

      • The state creates the organised crime by criminalising the drugs trade though.

        • This assumes that perfectly legal drugs, like oxycontin, aren’t available for sale illegally and aren’t big business for organized crime. But they are.

          Legalization doesn’t make organized crime go away. It just strips a lot of the profit away.

          • Oxy isn’t “legal”, a small cartel of sellers have been granted the exclusive rights, backed by government guns, to manufacture and distribute it.

            So no s**t there’s going to be black and gray markets.

            “legalization” isn’t the answer. The government relinquishing its alleged rights over individual human beings’ bodies and the inalienable extensive rights that stem from that is the only answer. i.e. government should have nothing to do with any inanimate object of any kind from raw materials all the way down to the end consumer product.

    • everyone needs to step back, and adopt a “who cares” attitude to drugs. Someone wants to use heroin or cocaine? Who cares.

      ++1!1!

      Nobody cares. Just like the commentors on this reddit about the 16-year-old who died after using LSD purchased on Silk Road.

      Reddit:

      [–]Clauderoughly[S] 29 minutes ago

      The Fucking idiot rich kid died from FALL off a 2 story balcony

      http://www.watoday.com.au/wa-news/teen-dies-after-scarborough-fall-20130219-2eofm.html

      He went to Church lands HS, which is an uber rich kids private school.

      It’s the same old “He took LSD, and thought he could fly” bullshit story

      [–]Turdle- 20 minutes ago

      Natural selection. Yup he lost

      • I care about drugs – their is no doubt they are bad, but I just feel treatment, education, and transparency work better. Look how few people smoke compared to 30 years ago! Look how less alcohol related deaths on the highway, have resulted from tactics that are quite frankly smarter in my opinion. Nicotine is considered many times more addictive than morphine!

        It has been way more effective than mandatory sentences, and driving everyone underground that wants to try the stuff – Stupid to try it – yes – but transparency would make its disadvantages obvious to even the most clueless beginner.

        • “Nicotine is considered many times more addictive than morphine!”

          Only by quacks.
          As a matter of fact, tobbaco dependency is much more psychological than physical. The nicotine patches are not as effective as people think.

          http://news.harvard.edu/gazette/story/2012/01/nicotine-letdown/

          If you want to stop smoking, you first have to help yourself. A patch or any other pill will not do the job for you.

          Smoking has terrible consequences but if you don’t think that the hell of a heroin addict is 1000 times worst, then it’s time to wake up.

          • Well, trying to quit nicotine by using nicotine is folly at best, if that is what you mean; but most science in the field – much of which was doctored by both the tobacco industry and political wizards that want you to “just say no to drugs”. Science like justice, should be blind.

            Dr. Henningfield’s study, while recognized by many foundations and science consortium’s, does seem to be in the back pocket of government interest groups. I’m not even sure ASAM is completely ‘double-blind’ as I’d like for such an organization.

    • yea…pff.. hiring a hitman is not violent…

    • Aw, you mad bro?

      Your childish and loony libertarian nonsense is about 1-inch deep in intellect. Is that all you loony libs can talk about, your notion of victimless crimes? Too bad loser — you lose, again. And you’re going to keep losing.

      The Silk Road busts are just beginning. I’m wondering where all those smug “the Feds are hopless” and “they’ll never stop us now” types are today? Why aren’t they here talking smack anymore? Why aren’t they here cracking wise? Oh right, I forgot: Because the Feds smashed your little drug haven with ease, and now the dominoes fall. I’m enjoying seeing the smug libs clam up. They’ve got nothing to say, and that’s a good thing.

      • That is sooooooo adorable that you are capable of vomiting out so many logical fallacies in one paragraph.

        And then you demonstrate for all what a sick and sadistic bastard you really are, cheerleading on kidnappings and detainment of people because they are doing something you find personally reprehensible (or some amorphous blob of mob-ocricy garbage).

        It’s scary that there are a lot of folks like you on this planet.

    • In spite of your rant, I tend to agree with legalizing marijuana usage. However, hard drugs are just toooo addicting.

      “…who were perfectly responsible with their personal drug use….”

      I knew a perfectly responsible heroin user who took his kids to daycare, sold all the furniture in the house, and whose wife came home from work to an empty house, a husband lying in a corner with a needle in his arm, and no money to pay daycare. The kids were left at daycare for weeks….

      “When people get into trouble with their own drug use, it usually relates less to the addictive nature of the substances than the legal/financial ramifications of using regularly.”

      How do you separate those “responsible” users from the rest? I don’t think you can. After all, using is not responsible in a country where it is illegal.

      “Law enforcement at all levels needs to leave people engaging in drug transactions the hell alone.”

      And just leave you the heck alone? Is that what you mean, George? ;^)

      • I can point to the same result from alcoholics, and they can be just as devastating; however, this country wasn’t falling down before 1911, when one of the 1st drug laws hit the books, and it wouldn’t be afterward. The code word here is TREATMENT – just because you decriminalize a substance does NOT mean you cannot make the law so you are required to get treatment by court order as a result of due process. We take a certain amount of people’s rights away every time we convict them of a crime and use due process to do that. In this case we would take way less of their basic human rights and simply force them to receive treatment. The rules that would trigger this due process would have to be hammered out by congress and court precedence, of course.

  4. I just read the complaint against these two individuals.

    Two words: Jury Nullification.

    That’s the strategy I’d try for. Defense counsel should attempt to get a jury consisting of younger people, let’s say under the age of 40, and encourage a nullification of the law. The totality of Sadler and White’s alleged crimes consisted of visiting post offices and mailing things. “Not guilty”. The USPS Inspectors and Homeland Security can pound sand.

  5. From https://twitter.com/runasand/status/387382229237637120: “Silk Road server imaged pursuant to a Mutual Legal Assistance Treaty request. Iceland is out, which leaves us with Latvia and Romania”.

  6. Great investigative piece! Read the fluff in the paper, but Krebs delivers on interesting details. Question for you: does the NSA run Bitcoin?

    • The Utah Data Center/N.S.A./ Area 51/Room 641A/XKeyscore/PRISM/Mainway/Marina/Meta Data

      Don’t believe the main stream media, who would rather spend hours covering the Government shutdown debate instead of reporting on the shut down of Silk Road and or about the highly illegal N.S.A surveillance that goes on.

      I think the main stream media should give B.K. his own hour show covering internet related news topics.

      They can pay him in Bit Coins !

    • I don’t think the NSA can “run Bitcoin”, due to bitcoin’s decentralized nature.

      If you meant to ask if the NSA has a foolproof way to tie bitcoin addresses to real-life identities… then, nope. The Ulbricht indictment even mentions that Silk Road’s Bitcoin Tumbler was designed with the sole purpose of making it all but impossible to trace buyer and vendor transactions.

      If NSA really had some sort of ledger that could map BTC addresses to identities, presumably many of Silk Road’s vendors would have cashed out some of their bitcoins to real-life bank accounts… and each of Silk Road’s thousands of vendors would have been rounded up and arrested within days. In reality, only one vendor was arrested due to his own carelessness (having a legit return address on a drug package).

      • Urm, bitcoin tumblers _are_ most definitely traceable, they just create more hoops to jump through. The only way to remain completely broken from the trail is to buy bitcoin in cash through a broker.

        • I’m not sure you understand how Bitcoin tumblers work. The point of a tumbler is that someone else’s coins are sent to a new address that you control; then there is no link at all between your original address/bitcoins and the new bitcoins you control. Some coins at address A moved to address B, and over there half an hour later, some coins moved from address X to address Y; who can say that the owner of A == the owner of Y?

          There is no way of easily undoing this if the tumbler is properly implemented (not actually a given, unfortunately, see Meiklejohn et al 2013) and does not keep logs. It’s actually pretty analogous to how Tor and other mix networks works, with similar vulnerabilities (eg not enough people using the mix reduces anonymity for both tumblers and Tor networks).

    • Does Krebs run NSA? :)

      Btw, Great Job, Brian!

  7. The Utah Data Center/N.S.A./ Area 51/Room 641A/XKeyscore/PRISM/Mainway/Marina/Meta Data

    The author of the below article makes a valid point about Silk Road being safer then buying illegal drugs on the street from gangs.

    “Of course you could make an argument that Friedersdorf’s argument is almost as much a condemnation of the overall War on Drugs as it is on Silk Road itself. In fact, you could argue that the “success” of Silk Road highlights how a legal and regulated market for such drugs would likely be quite efficient and safe. That’s not a “defense” of Silk Road or a suggestion that what Ulbricht did was morally correct. However, it’s just a statement of reality. The War on Drugs has a very large number of victims, and many of them are totally unrelated to drug addicts, but rather come with the infrastructure necessary to run a massive illegal business. ”

    The Unintended Consequences Of The Shutdown Of Silk Road
    http://www.techdirt.com/articles/20131005/00061124760/unintended-consequences-shutdown-silk-road.shtml

    • So, the thing about black markets is that they do not pay taxes. This is a problem for law abiding tax payers. As for health issues, don’t several legal substances hurt people a lot?

      The time of your post indicated EDT, so I’m pretty sure you’re not at the Utah Data Center. Just saying.

      • I suspect you may be the only person in the world for whom the chief problem represented by black markets is that they don’t pay sales tax.

        • you mean besides ever feeder in government….. right?

        • Black markets don’t pay any tax. I figure the US government could solve all of its problems and not default on loans by making it all legal – prostitution, drugs, gambling and everything but abusing kids. Then taxing it while protecting the innocents. Just an opinion. Hate that the US might default on loans – I don’t default on loans and I don’t like being part of a country that does.

          • You’re assuming that people who are felons would voluntarily pay taxes.

          • I think you are under the assumption that the government might default on its loans because it has “money problems”. That is simply not the case. This “crisis” is purely a political one. A sovereign currency such as the US dollar is created by computer keystroke.
            Our government is not like a household, states or Greece, all of which are currency users, not currency creators. The debt ceiling is a ludicrous, self-imposed limit leftover from the gold standard era. Google “modern monetary theory”.

            • modern monetary theory is predicated on the idea that one can artificially increase the amount of money relative to the same amount of economic output, and it is supposed to be of some sort of benefit.

              Modern monetary has been thoroughly debunked, because it would only be able to survive on the exact same basis that the current fiat realm stands on – use our currency or we’ll kill you.

              What we actually need is to completely repeal every single government control over money and let competing currencies have at it. This is the only way to ensure that there is a vehicle available for people to save in without getting “monetized” to oblivion, encourages a retention of value within the currency, allows for maximum penalties for fraud (which only exist if you aren’t currently part of the cabal), etc.

              You can have your inifinity moniez if you want, all I ask is that I can use what I want to pay for what I want without your guns and threats involved. Unfortunately that is the only thing that could possibly keep MMT in existence for more than a year or two, so round and round we go.

              The debt ceiling is there for a reason, and that is to maintain faith in the USD and all fiat government currencies. Without this, the USD would have been dead decades ago.

              • re: “Modern monetary has been thoroughly debunked”.

                By whom? What economist has “debunked” it?
                Modern Monetary Theory is an apolitical description of how our economy works today and is the antithesis of your fantasy of how things should work. I won’t comment on your competing currencies death wish because it is so unworkable it doesn’t deserve a response.

                • http://www.bis.org/publ/work297.pdf

                  I can find more if you want….

                  Just because MMT describes what “is” right now, does not mean that what it is describing is good, smart, or remotely sustainable.

                  Money is, in actual reality where real human actors are involved and not just the theoretical unicornosphere, both a product and a service. If you can’t get your head around that concept first, then anything you build that doesn’t rest on that axiom is 90% bullshit, including MMT. Again: Money ITSELF is a product….

          • General Electric………earned $14.2 billion in profits in 2010, but it paid not a penny in taxes because the bulk of those profits, some $9 billion, were offshore. In fact, GE got a $3.2 billion tax benefit.http://abcnews.go.com/Politics/general-electric-paid-federal-taxes-2010/story?id=13224558
            Eighty-three companies have stockpiled $1.43 trillion in untaxed profits in foreign countries, according to data compiled by Bloomberg. The leader is General Electric Co., which said in a Feb. 26 filing it has $108 billion sitting overseas.http://www.bloomberg.com/news/2013-03-11/overseas-tax-savings-for-u-s-drugmakers-under-threat.html
            $1.43 trillion…?????
            How Long Ago Is a Trillion Seconds?

            If you count backward, then:
            1 million seconds = 12 days ago
            1 billion seconds = 31 years ago
            1 trillion seconds = 30,000 B.C.
            (give or take a decade or two)

            Let’s Measure a Trillion in Height

            How high is a trillion in $1000 bills?

            If you stack a trillion-worth of $1000 bills together, then:
            1 million dollars = 4 inches high
            1 billion dollars = 364 feet high
            1 trillion dollars = 63 miles high
            (give or take a foot or two)
            Note that this is a STACK, not laid end-to-end.
            http://ihtd.org/festivalguide/resources/how-much-is-a-trillion-dollars/

            • Insanely enough, your wise benevolent overlords on mount Olympus- err Washington D.C. – have amassed a mortgage on the futures of our children and grandchildren to the tune of over TEN TIMES that much money.

              Just so you realize, that entire stockpile of save investment capital would cover just a bit over 2 years of the interest payments which our great-and-wise-and-wonderful-demigod-leaders make per year.

              So, yeah. If you want to get a sick-in-your gut feeling about a lot of money, I think that’s a lot more pertinent than the fact that businesses are scared spitless of investing in America right now. With very, very good reason. That’s a ripe-assed apple.

      • The Oregano Router

        The Utah Data Center has been having power problems as of late. Lots of big short circuits in their power systems which is causing ten of thousands of dollars in damage.

        Real, and the U.S. taxpayer is paying for it !

    • I suspect only some of SR’s customers were people with severe addictions who will now go back to buying their drugs of choice on the streets, or at least first trying the successor sites like BMR.

      Due to the nature of the technology, I think many Silk Road buyers were probably, well… “geeks”… for lack of a better term, with few, if any, real “drug connections” and no real-life way to otherwise obtain drugs. These folks won’t go to the streets, but they will also ultimately migrate to successor dark-web sites.

      In either case, the War on Drugs is an abject failure, but we all know that already. As stated above, all trials where the sole crime(s) involve drugs should be jury-nullified as a statement to law enforcement to stop this nonsense.

      • I doubt your first guess very much, because reportedly it could take several weeks to receive your shipment. Most of SR’s customers appear to be recreational users who could plan ahead (i.e. not beholden to an addiction and need stuff tomorrow). The vast majority of substances sold on the site were in personal amounts.

  8. The Oregano Router

    Their was another article online today which claims that the F.B.I. can not crack the encryption on Ross Ulbricht’s bit-coin wallet. Makes you wonder if the F.B.I. can prove that Ulbricht made as much money as they say he did or if it came from the two years of illegal online activity running Silk Road

    • everyone can see how many coins are in the wallet, that’s how the system works. when they say they can’t “crack the encryption”, they mean they don’t know the private key, and therefore can’t do anything with the coins. they’re stuck there until ulbricht gives up the private key.

    • hehehehehe cannot break the encryption? There are agencies worldwide very capable of breaking any type of encryption. What makes it easier is knowing who wrote it and the background behind the science.

      Its like anything else in this world. Things are kept very quiet until the ones who are watching think the time is ripe and they can make the most arrests and have as much information as possible.

      What do you think the bitcoins people would do if they found out their encryption was compromised? They would probably go to a newer, better more sophisticated encryption. Collecting data and profiling people is much more valuable over time than standing people up in court and limiting the effective use should something be compromised by a law enforcement 3rd party.

      So the theory is, who knows for sure if it has been broken. Does it need to be? Krebs mentioned in one of the write ups that some author will be coming out with a new book , which is directed towards the use of Bitcoins.

      Private keys are only private if they are kept well secure. In this world of uncertainty when it comes to operating systems, anything internet-facing is potential subject to be hacked.

      The encryption breaking theory doesnt have to be law enforecement, it could be the Bitcoins enemy/criminal masterminds that want to see the transactions and gather dirt on people.

      Conspriacy Theories exists in any fashion. Especially in the realm of networks.

      • You seem biased toward belief in what you want to be true rather than objective truth, and you understand precisely dick about how bitcoin works.

    • The entire focus of the NSA’s new fancy datacenter is to throw so much computing power at brute force and brute force-style (e.g. exploiting cryptographic weaknesses) approaches that cracking keys becomes trivial. It also has unbelievable amounts of fully redundant data storage, but the real focus is breaking encryption.

      While they may not have the key yet, and that’s a big may, they will likely have it soon whether or not he gives it up. Welcome to Setec Astronomy.

  9. I know what you mean boy boy. I just don’t have any sympathy for the spying lowlife hackers that work for them.

  10. The article twice mentions ‘fraud bazaar’.

    If it were a fraud SR and Co. would not be in trouble with the DEA now, would they?

  11. It is like eBay with Feedback. Nice!

  12. The FBI have said they are trying to secure 600,000 bit coins in DPR’s accounts, So if they just dumped this full amount into the market surely they could in fact make the bit coin currency crash through the floor and stop a lot of people using it? or at least kill the confidence in it

  13. Feds/Krebs Only Woke A Monster

    Feds are so stupid if they think it will change anything .Remember the Liberty Reserve . Feds where screaming the heads off saying it will be the end of a cyber crime and bla bla bla .Did it work ?? The short answer is NO . Even Krebs was a happy man them days asking everybody with some sarcasm to whats happened to this and whats happened to that .But unfortunately/fortunately euphoria didn’t last long .Week later it was businesses as usual if you know what i mean .

    Krebs you all so you forgot to mention that feds got access to his VPN logs , by force n VPN provider to give them the keys (lesson learned — never ever use public VPN service )

    I have a little surprise for Krebs/Feds . there is information that the former admins and users of the Silk Road are planning to resurrect the service. User RR writes: “We have SilkRoad v2.0 ready to launch and is now in its final testing stages. Our site has all the features of the original one and we have kept the same style of forum for your ease.”

    Excellent waist of money ,time , effort by FBI . Now we all know how to make online black market and how not to get court .

    • Good luck mighty mouse. Smug druggie Dread Pirate loser said exactly the same thing, and now we have him in shackles and an orange jumpsuit — just like we’ll get the owner of Silk Road 2.0. Just like we shut down Atlantis. Just like we’ll see you in a shackles and an orange jumpsuit.

      Ross Ulbricht, aka Dread Loser, is facing life and will likely settle for a mandatory 25 years. So, he’ll get out when he’s nearly 60. All that time, no internet access for him. When he gets out he won’t even know what world he’s living in.

      Ross Ulbricht, aka Dread Loser. We got him. In the end, we get them all. LOL!!!!

      • Lmao feds didn’t get Atlantis, the sites owners scammed everyone out of their bitcoins.

        Don’t get too ahead of yourself now :)

        Your constant ad hominems are pretty lame though, do you not know any other words than “libertarian” or “druggy”?

      • You’ve got to be one of the most fundamentalist religious statist zealots I have seen on the interblags in a while.

        Why on earth did you crawl out of your foxhole over at RedState.com and come here to troll your modern pagan idol worship?

        Also, your use of “we”. Hilarious, if it were so disgustingly sad and pathetic.

  14. Where are all those smug “the Feds are hopless” and “they’ll never stop Silk Road” types today? Why aren’t they here talking smack now? Why aren’t they here cracking wise? Oh right, I forgot: Because the Feds smashed your little drug haven with ease, and now the dominoes fall.

    So now the loony libertarians aren’t cracking wise, they’re crying and whining about their childish notions of “victimless crimes”. It’s all they have now since they’ve been stripped of their smugness. Seeing Dread Pirate in shackles, facing life in prison, is a nice little wake-up call — a nice way to slap the smugness off your face.

    I’m enjoying seeing the smug libertarian driggues clam up. They’ve got nothing to say now. It’s all over but the crying and whining.

    • Smug as they ever were: smug about a mega-millions black market which operated smoothly and successfully in the open for 3 years, which was busted only due to some carelessness on the organzer’s part, which has at least 3 clones standing by to replace it, and even though the entire server was seized with all its data, there still have only been 10 arrests so far (4 UKers, 2 Swedes, and 4 Americans (DPR, SR employee, NOD, NOD’s Alaskan customer)) at least one of which will probably not result in charges (Plutopete) out of somewhere upwards of 10,000 buyers & sellers.

      As long as SR was running, people like you could always pretend “ah, sure it looks safe now, but when it gets busted, there will be thousands of arrests and *then* you’ll be sorry! Tor is holier than swiss cheese, GPG was cracked by the NSA ages ago!”

      Well, here it is. It’s been busted. Here’s the worst-case scenario – LE has the server and DPR. Look carefully what is happening. Do we see thousands or hundreds of arrests? Do we see PGP cracked? Do we see Snowden mocking users of Silk Road for their naivete? Does the reason for the bust seem remotely related to Tor vulnerabilities? We do not see any of this.

      So, it looks like life will go on much as it did before.

    • Whats a driggue?

  15. Hackers are connected to everybody nowadays. There is one that has posted on this blog thinking hes cute using a certain name, that is spying on me for some junkie drug dealers in my neighborhood. And ya hes a heroin addict who probably used the site which is probably why he couldn’t resist posting. They are all certifiable bottom feeders on the bottom of the totem pole and what they think really doesn’t count. I don’t need to be anonymous in whats becoming a fake paranoid world.

    What these idiots also don’t realize, is that their phones are hacked by the same people and that hackers are pathological by nature and can never be trusted. I mean this guy went to jail for credit card fraud (caught with 80 credit cards) and ratted out his whole crew and I bet he still talks to some of them. He was in there for a month with a fake identity and never even had a lawyer and walked away. He might still be an informant.

    I also have no problem with people doing drugs if they are not hurting anybody. I agree its a waste of money and a losing battle. Legalizing some of them like pot would stop alot of crime and unscrupulous dealers. But these hackers are the scum of society and no one has any sympathy for them when they get 35 years or death.

  16. Just want to add I never did drugs in my life, except for alcohol and weed once in a while.

  17. Disgraced&ashamed

    Everyday I become more ashamed to be a citizen of this country. It is simply disgusting what we the people have aloud our government to become! Your rights are soon to be bent and manipulated into a distant memory, and you all simply stand by doing nothing. This once proud county is doomed. Welcome to the new nazi Germany..

    • Really? Is anyone forcing you to stay here? Trust me genius, the rights and privileges that you have on your worst day are 100x better than someone else’s on their best day.

      And as long as you’re making Nazi references, let me be the first to be a grammar Nazi. The proper verbiage in your post should be ALLOWED, not ALOUD. And I won’t even start with your countless punctuation errors.

      • Disgraced&ashamed

        Glad you biggest concern is punctuation and grammar. How does it feel to be a sheep? You must be NSA or one of the other fachist as*bags thats drownding this country.

        People like you are the problem. They trample our right, and oh no he didn’t punctuate that properly! Dumbas* Make sure not to die in your sleep tonight, as I so look forward to hearing more of your genius.

        • “Dumbas* Make sure not to die in your sleep tonight, as I so look forward to hearing more of your genius.”
          ^^That comment alone speaks volumes about your intelligence level, or lack thereof. My nephew wouldn’t even take you seriously. And he’s 7 years old. He’d probably laugh at you because I know after you read my comment and wrote yours you were all huffy ‘n puffy and foaming at the mouth.

          My biggest concern is not your grammar or punctuation. As a matter of fact, I was pointing out your mistakes to prove a point. The point being that you shouldn’t comment on issues that you know nothing about. There’s a lot to be said about those that educate themselves on current issues, and those that read others comments about current issues and base their opinion(s) solely on them. And I thought you’d understand the whole Nazi reference thing (since I said that in my initial reply, but clearly you skipped over that part.)

          Let’s get some things straight here, dummy. I was born and raised in United States of America. I am well educated (I have two Masters Degrees), I am well employed, nearly flawless credit, and have absolutely zero affiliation with the NSA. How have I trampled on anyone’s rights – let alone yours? Please do tell.

          I am much more Liberal than you might think, and I am the absolute furthest thing from an “angel”. I have done several drugs thousands of times, and I am in full favor of the decriminalization, legalization, regulation and taxation of marijuana nationwide. And to be 100% honest, the only reason I never bought any drugs on Silk Road is because I have enough connections here locally where I can get anything at any time. I don’t need to take any risks by basically saying to the Postal Inspector, “hey man, I have some blow being shipped to me. Can you make sure I don’t have to sign for it?”

          But like I said before, your worst day here is someone else’s best day somewhere else, maybe even here in the USA. Stop complaining all of the time and do something about it. That’s one of the many privileges that we have as American Citizens. We can enact change. And if you don’t like it, GTFO. Plain and simple.

          • Disgraced&ashamed

            Lofl im impressed with your creditials and take back all I said. Your still a fuc*stick, just admit it. I just don’t feel the need to justify anything by rambling off some crap about how brilliant I am.

            I bought 2 master degrees on the deep web just now! See I’m awesome now! Can I be in your special club? Am I qualified to have an opinion now?

            • Disgraced&ashamed

              Just a side note. I assure you I know more about the topic of this article than you ever will.

  18. Interesting collection of comments on this blog. Have to say, Krebs delivers on meaty, informational investigative material. His following delivers on the drama, which is also fun to read! But facts are the real thing…

  19. After reading these comments, I had to do a triple-take to make sure that I wasn’t on youtube.

  20. You can update your article.
    According to the smoking gun, Sadler’s home was raided as early as july.
    And he began to cooperate around this time. Long before Ulbricht was arrested.

    http://www.thesmokinggun.com/documents/silk-road-dealer-cooperating-567432

  21. hey Krebs, You deserve a cut of this, honestly.

    Feds seize $28 million in bitcoins from alleged Silk Road operator. Federal authorities seized a bitcoin wallet containing $28 million in bitcoins belonging to the man accused of running the Silk Road online black market.

  22. http://www.forbes.com/sites/andygreenberg/2013/11/06/as-ross-ulbricht-appears-in-new-york-court-his-lawyer-says-hes-not-the-fbis-dread-pirate-roberts/

    Excerpt:

    The thin, tousled-hair 29-year-old who stood before a judge in a downtown Manhattan courtroom Wednesday didn’t look like an Internet drug kingpin. And the lawyer defending him says he intends to show that he’s not.

    Ross William Ulbricht, the alleged creator of the Web’s-most-popular anonymous drug bazaar known as the Silk Road, appeared in a New York court for the first time Wednesday morning for an uneventful hearing that established he would have a bail hearing in just over two weeks, as well as a pretrial hearing within 30 days to hear the government’s charges against him. Ulbricht wore blue prison scrubs over a brown T-shirt, and answered the judge in short sentences like “Yes, sir,” and “I do,” when asked if he understood the proceedings.

    In the courthouse hallway after the short hearing, Ulbricht’s attorney Joshua Dratel had much more to say: Namely, that Ulbricht is not the creator of the Silk Road, who used the pseudonym the Dread Pirate Roberts to run a lucrative online operation. “The evidence can’t establish that he is who they say he is, or that he’s done what they say he’s done,” Dratel told reporters.

    (snip)