Silk Road is dead, but online organised crime lives on

By Jordan Robertson, Bloomberg

Silk Road, the infamous $1.2 billion Internet black market, was more than a highly successful bazaar for drugs, guns and hacking tools. Even as its alleged founder goes on trial today following the site’s seizure by law enforcement in 2013, the website lives on as a case study in online organized crime and offers a blueprint that darknet entrepreneurs continue to follow.

The original Silk Road, which required a special program called Tor to access, was so influential that several copycats have adopted its name. Silk Road 2.0, which popped up after the original shut down, copied its predecessor so faithfully before it, too, was raided by police — from the administrator’s pseudonym Dread Pirate Roberts to the logo, a green camel — that the sites were virtually indistinguishable. A new entrant called Silk Road Reloaded is the latest to carry the mantle.

More than a year after the U.S. shut down Silk Road and charged former Eagle Scout Ross William Ulbricht with running it, authorities are playing whack-a-mole against an expanding cast of imitator sites, which have capably filled the void, according to Dan Palumbo, research director of Digital Citizens Alliance, a Washington organization that studies Internet security issues including darknet marketplaces. When Silk Road was operating from 2011 to 2013, there were only a few such sites, but now there are at least a dozen, says Palumbo. And that’s not counting the dozen or so that have already been shut down, including Silk Road 2.0. The two biggest currently are Evolution Marketplace and Agora Marketplace, which combined had more than 46,000 listings of drugs for sale as of last month, according to the Digital Citizens Alliance.

The illegal marketplaces are practically interchangeable. When one closes, another takes its place. While using the name Silk Road is no guarantee for success, some website operators choose a recognizable brand to get an advantage over their competitors. What can they lose? They’re facing far more serious offenses than intellectual-property theft.

Police tend to go after the site operators, leaving individual buyers and sellers at less risk, Palumbo says. Users “just need to find another website. It shows you what law enforcement is up against. They’ve dealt significant blows to darknet drug markets over the past few years, but it’s a pretty resilient group,” he says. Despite relying on cloaking techonlogies such as Tor, the networks have been penetrated by investigators, and many site administrators have doomed themselves by making simple technological mistakes that helped police identify them. Prosecutors say that Ulbricht mistakenly logged onto a question-and-answer site for programmers called Stack Overflow using his real name and asked a question about connecting to Tor that later allowed them to connect him to Silk Road. They say he quickly realized the error and changed his username to “frosty.”

While the risk is enormous, people keep creating these marketplaces because they’re easy to set up and highly profitable, says Kevin Epstein, vice president of advanced security and governance for Proofpoint, a Sunnyvale, California, cyber-security firm. “Until a Silk Road-type site gets taken down in minutes to hours, versus months to years, it will be profitable, and criminals will continue to put those up,” he says. “It’s an absolute treadmill.”-BLOOMBERG

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