USMS Has Announced The Final Silk Road Bitcoin Auction

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

The U.S. government has declared that it will be auctioning off the remaining set of bitcoins that were confiscated from the Silk Road founder Ross Ulbricht. This auction will be the fourth and final one since a large stash of bitcoin was confiscated from Ulbricht in 2013.

Details of the bitcoin auction

The U.S. Marshals Service (USMS) will be auctioning off these bitcoins on Nov. 5, 2015. The auction will be held during a six hour period from 8 am to 2 pm EST. The total number of btc available in this auction will be approximately 44,341.

According to the USMS press release, the bitcoins will be auctioned off in 22 blocks, where 21 blocks will be of 2,000 BTC, while 1 block will be of approximately 2,341 BTC. All the winning bidders will be notified on Nov. 6, 2015.

Only cash offers will be accepted for this auction, which means any other type of payment such as bank transfer, credit card, etc. will be rejected. As always, all the bids will be accepted only from the pre-registered bidders.

How to register for the auction?

The registration period for the auction starts from Oct. 19, 2015 and will end on the noon of Nov. 2, 2015. Therefore, all the potential bidders must complete their registration requirements by that time.

All the documents that were submitted for registration of previous bitcoin auctions held by the USMS will not be considered valid for this auction, which means interested bidders will have to submit new registration documents if they wish to be considered for this auction.

The United States Marshals Service (USMS) is a U.S. federal law enforcement agency within the U.S. Department of Justice. The office of U.S. Marshals is the oldest American federal law enforcement agency.
Unfortunately, foreign investors are not allowed to directly register for this auction, as this auction is only open for the citizens of the United States. Therefore, any foreign investor will have to register through somebody who is working for them in the United States.

Furthermore, all the bidders will have to deposit an amount of $100,000 before the start of the auction. This step has been taken by the USMS to weed out any non-serious bidders. All the applicants who want to register for this auction will have to submit a photo ID issued by the U.S. government among other things.

Details of the previous auctions

Although the crackdown against the Silk Road was part of a joint operation between the U.S. Federal Bureau of Investigation (FBI) and the U.S. Secret Service, it was the U.S. Marshals Service that was given the charge of handling the seized goods from the Silk Road, which was mostly bitcoins. A total of approximately 174,000 BTC were confiscated at the time of seizure.

So far, the USMS has held a total of three auctions where most of the bitcoins seized from the Silk Road have been sold to the qualified members of the US public. The first auction of 30,000 BTC was held in June 2014, which attracted 45 bidders who made 63 bids. The Draper University founder and billionaire venture capitalist Tim Draper won this auction by shelling out an estimated $18 million at that time.

The second auction had 50,000 BTC on sale but it recorded a way lower turnout when compared to the first auction. It had only 11 bidders who made 27 bids. Most experts believed that the lower turnout was due to the declining value of bitcoin at that time. Incidentally, price of bitcoin was experiencing huge volatility in those days and was hovering between $360 and $370. Bitcoins in this auction were partially won by Tim Draper, alongside Second Market founder Barry Silbert.

The third auction was held in March 2015, in which another 50,000 BTC, worth $13.4 million, were sold to the highest bidder. Although there were 14 bidders who competed for the bitcoins in the third auction, almost 47,000 or 94% of the bitcoins were bought by the Cumberland Mining, a secretive bitcoin company.

Bitcoin is a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009.
Therefore, the coming auction to be held on Nov. 5, 2015 will be the fourth and final auction of the bitcoins seized from the Silk Road creator Ross Ulbricht. Authorities are hoping that a higher number of bidders will turnout for this auction as these are the last of the famous Silk Road bitcoins. This final auction will sell approximately 44,341 BTC worth more than $10 million based on present exchange rates.

History of the btc being sold in this auction

In Oct. 2013, the Silk Road mastermind Ross William Ulbricht was arrested by the U.S. authorities. A total of 144,000 BTC were seized from Ross Ulbricht’s laptop. Additionally, 29,655 BTC were held in wallets on the Silk Road at the time it was closed. This brought the total amount of bitcoins seized during the shutdown of the Silk Road to approximately 174,000 BTC.

On Jan. 27, 2015, the U.S. government and Ross Ulbricht agreed to the sale of the confiscated bitcoins during the trial. According to this agreement, Ross Ulbricht allowed the United States to sell any portion or all of the confiscated bitcoins. The manner of the sale of bitcoins was also left to be determined by the U.S. government.

Conviction and sentencing of Ross Ulbricht

Silk Road was the most famous online marketplace to buy and sell illegal narcotics and other banned products. After being arrested for operating Silk Road, Ross Ulbricht was charged with conspiracy to traffic narcotics, computer hacking, money laundering and attempting to kill six people. Although murder charges were later dropped from the indictment, Ross was convicted for all the other charges in connection with his ownership and operation of Silk Road on Feb. 2015.

Ulbricht was sentenced to life imprisonment of twenty years without the possibility of parole on May 29, 2015. He is imprisoned in the Metropolitan Detention Center, Brooklyn. He has also been ordered to a civil asset forfeiture of more than $183 million.


At the time of Ross Ulbricht’s arrest, the total bitcoins seized from him by the USMS was the largest single seizure of bitcoin ever. Although since the busting of the Silk Road several other darknet markets have fallen, the bitcoins seized from Ulbricht still remains with the USMS. However, this will come to an end on Nov. 5, 2015 when last batch of the famous Silk Road btc will be auctioned off to their highest bidders.

Read More

Online Drugs Selling 2 Years After The Silk Road Demise

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

It’s been 2yrs. since federal cops apprehended the Silk Road founder Ross Ulbricht at a San Francisco public library, bringing an end to his online marketplace business. Despite all this the darknet market’s vision of unrestricted commerce still continues living on.

Without too much effort, anyone with web access can buy illegal drugs from approved vendors on the deep web. More than half of all anonymous drug sites implement websites with templates that closely resemble that of Silk Road, from simple things such as formatting to user policy. Dread Pirate Roberts’ site created some form of status quo which other actors are now following suit, the complexity of setting up a new marketplace has been reduced to just imitating them.

Most darknet markets operate briskly, and have relatively stable daily sales averaging at around $300,000-$500,000. This marks a huge growth from when Silk Road was still experimenting with sales of hallucinogenic mushrooms in 2011. These sites offer dealers more product reliability, while at the same time removing the risk of confrontation or physical violence in face-to-face meetings with customers. Though some of these Silk Road successors host products such as stolen credit cards and Netflix accounts, most listings still focus on drugs which dealers ship through ordinary postal mail.

Silk Road was an online black market and the first modern darknet market, best known as a platform for selling illegal drugs.

Marijuana typically accounts for a quarter of the overall sales found in these sites, closely followed by MDMA which is also referred to as Molly or ecstasy. Nevertheless, since the closure of Silk Road, theft by new market operators, conning by fellow vendors and arrest by state authorities have posed significant risks for market players. Generally, market activity tends to slump when law enforcers bust a few of them or massive scams are reported, but then rebound a short while later with new trendsetters.

One of the largest dark web sites to pick up from Silk Road was Evolution, however it recently closed down after administrators were suspected of pilfering cash payments stored in escrow intended for traders. Agora also shut down its operations in August for purported security upgrades, with operators cautioning account holders to withdraw their funds before the process begins. The main strategy which new operators are employing is not to stay in business for too long, there’s a considerably high demand for these services so vendors will still continue taking financial risks.

The current market leader is AlphaBay Market, closely followed by Abraxas and Nucleus Market which have both grown significantly since Agora was closed. Latest reports show that AlphaBay has around 21,372 drug listings, while Abraxas has 16,000 and Nucleus nearly 13,000. Though these listings don’t directly correlate with sales volume, to a certain extent they reflect some level of growth in darknet operations.

Those who buy drugs from these sites aren’t always timid about discussing their experiences, customers use special forums and reddit to talk about their successes and even warn others when cops intercept a package. Sales on these platforms appear to be robust, though the overall growth appears to be explosive, particularly taking into consideration the large international market for narcotics.

One thing that’s coming out clear after 2yrs. is that the online drug trade problem hasn’t gotten worse than before, since new markets emerge and go while others are caught in fraudulent activities of taking people’s money and shutting down. Even so, key sets of evidence that were used against Ross Ulbricht during the Silk Road trial may prove crucial for would-be operators to avoid being caught as well. For instance, it’s a bad idea for administrators to openly tell friends what they are doing all the time, or keep a detailed journal of their work which can be used to leak IP addresses over to another server.

A darknet (or dark net) is an overlay network that can only be accessed with specific software, configurations, or authorization, often using non-standard communications protocols and ports.
Nevertheless, security isn’t always guaranteed when using darknet sites. The apprehension of Blake Benthall from Silk Road 2.0 just goes to show that future operators can be even less careful than their predecessors; feds reportedly infiltrated Silk Road 2.0 and identified its servers by configuring Tor network’s structure of hiding user IP details. During his arrest, Benthall lived large but did the mistake of directly connecting to his personal server regularly from the hotel room when traveling.

The Silk Road case also laid a roadmap for future prosecutions involving the bitcoin currency. Before this trial, prosecutors didn’t know that bitcoin wallet files don’t just represent the amount of bitcoins to be seized, but can as well index the entire transaction history which was used for bitcoins. Ulbricht wasn’t keen enough to take matters in his own hands and conceal the virtual currency he transferred to his own wallet.

Most people who buy drugs online risk life imprisonment and tough federal penalties, but they still continue with their business since there are no available avenues of buying narcotics legally. Others just do it for the thrill of defying government orders. A couple of lessons are emerging from the Silk Road case, including that it would be wise for darknet operators to reside outside America, probably in a foreign jurisdiction unlikely to collaborate with U.S authorities.

Silk Road was developed by an amateur script language PHP programmer who made lots of mistakes; current market operators probably enjoy better internet protection and more layers of anonymity for maximum safety even when the server is breached. After Silk Road’s 2-yr. reign as the undisputed trusted leader, some dark web sites appear to forgo some level of privacy in exchange for improved reputation, including subtle changes such as giving more specific time-stamps for online customer reviews.

Read More

Silk Road Vendor Found Guilty For Selling Thousands Of Dollars Worth Of Methylone

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

As the Department of Justice at Middle District of Florida announced “federal jury has found Andrew Pieters (30, Orlando) guilty of conspiracy to distribute and possess with intent to distribute a controlled substance and attempting to possess with intent to distribute a controlled substance.” Pieters will be serving the maximum penalty of 20 years in federal prison.

Who is Andrew Pieters?Andrew Pieters

Andrew Pieters, a former vendor on the Silk Road marketplace was arrested in January 9th, 2015.

Evidence suggests that Pieters was, not only selling drugs at the online black market, but out on the streets, too. Apparently, the former Silk Road vendor was a top-level distributor of methylone in central Florida.

Methylone (street name – molly), is basically a club drug; similar to ecstasy, it has much more sever health risks. Molly is a Schedule I controlled substance that causes overheating, dehydration, and even death.

According to evidence, the drug that Andrew Pieters, aka Drew, was selling between January and August 2013 had been imported from China and purchased through Silk Road, a well-known online drug marketplace. The Silk Road had been shut down in October 2013, and its founder, Ross Ulbricht, sentenced to a lifetime in prison, earlier this year.

But, back to Pieters – according to some sources, he was already known to the police; the trouble was that they were unable to gather enough evidence against him to make the case. Pieters was a longtime suspect of the DEA, but since selling drugs on the Silk Road marketplace was anonymous, they had some trouble identifying him.

After the shutdown of the Silk Road, Pieters was forced to move his business out to the streets, where an entirely different set of rules applied. Leaving behind the security that the online trading provided, Pieters was completely unaware of the street rules. If he had been, he would’ve been more cautious. Luckily for the DEA, an informer recognized him as the top-level seller on the streets, so they made a plan to catch him red-handed.

The Operation

The whole operation of catching the former Silk Road vendor was thoroughly planned by the Special DEA Agent, Schappert.

The DEA started an investigation on him in November 2014 in cooperation with the informer, who was actually a former convict. Apparently, the informer identified Andrew Pieters as a person who could receive and sell a kilo of methylone to prospective buyers within a week.

In December 2014, the informer, working closely with the DEA, negotiated the sale of 2 kilos of methylone. The call was, however, recorded.


Pieters met with the informer first time in January 2015, when they arranged the trade. What Pieters wasn’t aware of was that his future client was thoroughly wired and the whole conversation was recorded. Pieters was clearly heard to say that he already had a buyer, meaning that he was acting as a middleman in this particular trade. Pieters agreed to receive 2 kilos of methylone and deliver it to the buyer; he was also heard to say how this time he’s willing to do it without commission, but that he will demand some percentage of the next deal.

The DEA in cooperation with the local detectives, made a plan to provide the informer with 2 kilos of fake methylone to take it to Pieters. Fake drug was packaged in the US Postal Service Box. Informer and Pieters met again at the Millenia Place apartments located at 5215 Blvd., Orlando, Florida.

Packed with video and audio recording equipment, the informer parked his car on the arranged address and waited for Pieters; while the DEA agent and detectives stayed just behind, within the transmission range.

When Pieters arrived in his BMW, the informer took the 2 kilos of drugs and joined Pieters in his car. Soon after he was arrested.

According to the DEA agent, Pieters refused to provide the name of his buyer, who allegedly canceled the buyout just before the arranged meeting; apparently, the former Silk Road vendor intended to sell the drug for his own gain, since the street value of a kilogram of molly was around $11,000.

Online Black MarketDepartment of Justice confirmed that “prior to his arrest, Pieters had planned to distribute at least a kilogram per week of methylone in central Florida.”

Andrew ‘Drew’ Pieters faces a maximum penalty of 20 years in federal prison, for the attempt to possess and distribute illegal drug called methylone.

His sentence hearing is scheduled for December 10, 2015.

Read More

Corrupt FBI Agent Allegedly Threatens Former Silk Road Architect

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

On Wednesday 27th September 2015, a man believed by many to be the orchestrator of Silkroad has made a slew of accusations against a person he suspects to be an FBI employee.

Variety JonesVariety Jones, who many believe to be the Silkroad architectas well as a mentor to Silkroad creator Ross Ulbricht, accuses the unnamed rogue FBI agent of threatening to kill him and also torture Ulbricht’s mother and sister if he did not help him get the pass phrase to Silkroad bitcoin wallet estimated to be worth around $70 million.

The unnamed FBI agent uses a pseudonym of Diamond, and has been accused by Jones of among other things, leaking sensitive information and extorting dark web owners for bitcoin.

According to Variety Jones, Diamond believed that his involvement in creating Silkroad could be of use to him to gain access to the Silkroad bitcoin funds. Jones alleges that he wanted him to relocate to Singapore where the agent could then set up a safe house for him. The rogue agent assured him that he would help him be clear of the clutches of the feds. Jones wrote this information on MyPlantGanja forum.

Jones says that when he refused to cooperate with Diamond to help him obtain keys for the encrypted wallet, the threats became more serious every day.

He says that the rogue agent started to get nastier and nastier every day, because he did not cooperate in assisting him obtain the keys to encrypted wallet.

“I knew he was serious with his regular threats. If I didn’t do as he asked, or ended up in custody of any authority, he would use his power and authority to get me killed,” said Jones.

Leaked sensitive information

Jones also claims that Diamond gave him classified information regarding Silkroad investigations upfront. Specifically, Jones cites the information about former Silkroad special agents Shaun Bridges and Carl Mark Force IV, two US law enforcement officers who were charged for transferring Silkroad seized funds to their private accounts during the investigation into Silkroad. Given that only high-ranking FBI members have the authority and power over this kind of information, Jones was convinced that Diamond was indeed an FBI agent.

Jones claimed that he was approached by an FBI agent under online pseudonym who then provided inside info on FBI investigations before such information was made public. Diamond was very determined to gain access to the Silkroad bitcoin wallet that contained an estimated 300,000 BTC. These previously belonged to Ross Ulbricht, the convicted creator of Silkroad.


When Variety Jones showed hesitation to help Diamond gain access to the Silkroad bitcoin wallet, the agent threatened to kidnap Ulbricht’s sister and mother and then torture them until the Silkroad creator revealed the password, this is according to one of his forum posts.

As evidence, Jones provided Diamond’s TorChat ID on his forum post. Although the ID is active, the person behind it didn’t immediately respond to messages.

Jones said that he made contact with the Assistant U.S. Attorney General for Southern District of New York to warn him of Diamond’s actions. This is the officer who was in charge of prosecuting Silkroad creator Ross Ulbricht.

The FBI is not taking the matter lightly.

The FBI released a statement about the whole situation, saying that they are aware of claims that were made by Variety Jones. Through an emailed statement, the FBI says that they have already forwarded the allegations to the right offices for further review. The agency treats claims of employee misconduct seriously as their mission is to always uphold the rule of law.

Jones has since turned himself in to the authorities believing that his life was in danger if he didn’t do so.

Trapping Diamond

SilkroadAfter realizing that Diamond was a powerful and a high-ranking officer of the FBI, Jones began to look for ways of catching him so that he would reveal his real identity.

He began looking for opportunities to ensnare Diamond on Agora Marketplace when he came across the tiniest bit of evidence about his identity. But the shutting down of Agora on April 26 was a huge blow as it took away the only real chance of unmasking the rogue agent.

Having seen the last chance of trapping Diamond gone, Jones thought it better to surrender himself to the feds, in return for protection. He cautioned Ulbricht’s family members and also asked the FBI to ensure that Diamond does not kidnap Ulbricht’s sister or mother and that Silkroad creator Ross Ulbricht is not under any harm from Diamond’s cronies.

Read More

DPR Mentor To Be Back Online

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Dread Pirate RobertsThe mentor of the clandestine operator of Silkroad, Ross Ulbricht (also known as Dread Pirate Roberts), has appeared back online after a long stint of silence. Apart from being his advisor, Variety Jones also made key financial and security decisions on the Silkroad during its operations. He further tried to expand the Silkroad portfolio to other sectors such as installation of encrypted email service.

Based on information sourced from backup logs, Jones had last been active the time Silkroad was being shut down after a sanctioned federal embargo. Thereafter, he maintained a low profile and did not appear on any Silkroad public forum until recently.

The research conducted by an independent researcher by the name of “La Moustache” determined that Variety Jones is likely Roger or Thomas Clark. Though web data showed his account to be operational, efforts to chat with Jones/Clark were unfruitful.

Moreover, another of his old usernames “Plural of Mongoose” has been resurrected on a popular cannabis forum. This is the moniker that led researcher La Moustache to track down Variety Jones, after he started posting long, auto-biographical writings about himself.

Though it’s still uncertain as to where the physical location of Plural of Mongoose is, one of his recent posts hints that he’ll be going somewhere or making a journey of some sort. Which suggests that he might be headed to prison. The man wrote “I’ve got this trip planned…” and he’s looking forward to exploring the big city though not yet sure where to stay upon arrival. Mr. Jones ends the message by giving a chilling premonition that it could be a “state of the art” facility he’s going to, if readers actually know what he means.

It seems as if he has logged back to his old account, with the sole aim of communicating with old contacts before making the alleged trip. Assuming this account is being run by the original owner, and not a third party individual. Variety Jones says he has no idea when he’ll be back from the voyage, which is why the account was revived to have some little conversation with former Silkroad friends, enemies and acquaintances alike before going away.

The posts, some containing as much as 3,000 words, explain how “Plural of Mongoose” was arrested after being found running an underground cannabis business in UK, amongst other related crimes. At one point, Jones even identifies himself as “Roger Thomas Clark,” which were the same names uncovered by researcher La Moustache. Despite these revelations the FBI have not yet given any response as to their next course of action.

During his active years at the Silkroad, Variety played an important role in pointing out security holes on the site which needed immediate fixing. As the Silkroad platform steadily grew, he soon became a staffer and right-hand man of founder Ulbricht.

Silkroad-market-screenDue to Jones’s influence, Ross who was operating under the pseudonym of DPR began appreciating just how popular the Silkroad brand could get. In one of his uncovered journals, Ulbricht writes that the man helped him develop a bigger picture of their operations. He helped DPR navigate through uncharted waters which led to further expansion of the website, such as opening of Silkroad exchange, chat, credit union and lottery participation programs.

Recent revelations show that before the federal investigations into Silkroad started, Jones was already planning to shape the Silkroad site into a stronger more tamper-proof entity which could survive years of intense security searches. In fact, there are more than 1,400 chat log pages between Variety Jones and Dread Pirate Roberts. That figure is at least 4 times more than all messages connecting DPR with other employees on the Silkroad platform, clearly showing their business relations were more detailed.

Jones later changed his Silkroad name to Cimon and was present during its active years, giving the operator tips on how to expand until it reached its heydays as the primary online drug bazaar. Ulbricht sought advice from Jones because he was good at adding his own personal touch to the fast emerging Silkroad market. From his activities till date, it’s apparent that Variety Jones has a habit of changing his online moniker every so often, maybe in a bid to confuse federal agents.

Read More

The Mysterious Terrain Of Silk Road

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Once more, Alex Winter has proven himself as a thorough and dedicated researcher and documentary filmmaker. His newest release “Deep Web” is even far more convincing than the Downloaded (2013).

The topic of the movie, however, doesn’t cover the whole Deep Web, as the title suggests, but it’s narrowed to the whole Silk Road and Ross Ulbricht aka Dread Pirate Roberts history. The Deep Web movie covers the complete story, from the foundation of the drug market website, to its final seizing and the conviction of its founder Ross Ulbricht.

As Winter says, Ulbricht was math and encryption enthusiast and the main idea behind the Silk Road network was to create secure and anonymous drug market and to stop violence in the drug selling world; not just between drug dealers themselves but the violence of FBI, DEA, LS and others who were in charge of the cases.


The Silk Road was an ideal place to sell and buy drugs. It offered high anonymity and user reviews made sellers more reliable. It was the largest darknet market in existence and since it was operating with TOR and Bitcoin it was completely untraceable. What’s more, it had everything – heroin, opium, psychedelics …

But, when things got real and the millions of dollars went through the system, it became suspicious and first traces occurred.

One of the first breakthroughs was made, unintentionally, by a mother of a fourteen year old who was suddenly interested in snail mail delivery. She opened one of his mails and found a DVD box with crystal meth inside.

Homeland Security investigators started intercepting mail and shipments from all over the world and found mail full of drugs and currency, all linked to Silk Road. The FBI simultaneously started its own investigation and it took them two years to actually catch the culprit.

Lot of noise was made about FBI’s apparent illegal activities while tracing down the hosting servers in Iceland and Germany. It is believed that they are actually hacked but FBI never revealed its method.

Deep-Web-2015-203x300Ross admitted that he created Silk Road but he claimed that he wasn’t DPR, even though he was logged in into administrator panel of the website while being arrested. He claimed that the real DPR framed him.

One of the evidence that FBI used to link Ross Ulbricht to the Dread Pirate Roberts was a journal that was found on his laptop describing his involvement in the Silk Road and the bitcoins seized from his laptop came directly from the site.

Unfortunately, Winter wasn’t able to interview Ulbricht from prison because of the severity of the charges, however he did interviewed his family, friends and even the people involved directly in drug selling business.

To underline, Alex Winter has made an excellent documentary and didn’t not spare anyone, giving the complete insight of the story about a deep web, Silk Road drug market, and Ross Ulbricht and its definitely worth watching whether you are new to this topic or not.

Read More

Former Mt. Gox CEO Charged With Embezzlement

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

The Mt. Gox and Mark Karpeles are in news again. Those who had been following the Mt. Gox saga wouldn’t be surprised to know that after nearly six weeks of his arrest, Mark Karpeles, former CEO of the bitcoin exchange, have been charged with embezzlement.

Mt. Gox has been embroiled in speculation and controversy since its bankruptcy in early 2014. The New York office of the U.S. Attorney General reportedly issued a subpoena for determining factuality of the missing funds reports. Investigators have been trying to ascertain the whereabouts of millions of dollars and the reason for their disappearance. Also, Japanese prosecutors launched a special investigation into Mt. Gox, which resulted in the arrest and now framing of charges against Karpeles.

Alleged crime of Karpeles

Mt_GoxAs reported by Japan’s Kyodo News, Karpeles is suspected of moving money into his own company’s accounts from the accounts of his clients. Allegedly, he transferred the money from Gox’s bank account to other accounts in October 2013. The total amount transferred is around $2.7 million.

Apparently, he used most of the money for buying licenses for 3D-rendering software. However, some of the money was also spent on a highly expensive “custom-built bed.” Karpeles had denied any wrongdoing at his company before he was arrested in August. According to him, he did everything to prevent any wrongdoing but it still happened. He blamed hackers for the loss of bitcoins and the eventual collapse of Mt. Gox.

Although this is the first time Karpeles has been charged for a financial crime, he had been a suspect in a cybercrime before. In Feb, 2014, the Department of Homeland Security (DHS) special agent Jared Deryeghiayan disclosed that during 2012 and 2013 Karpeles was pursued as a suspected operator and owner of the Silk Road. At that time, Mark Karpeles was the CEO of Mt. Gox and the Silk Road was a massive online drug market.

Bitcoin bubble and Mt. Gox bankruptcy

bitcoin-newsThe tech industry was captivated by the bitcoin bubble in late 2013 to early 2014. Over the period of two months the price of bitcoin rallied from nearly $118 to around $1000. Several rags to riches stories emerged, and many more people started getting interested in the quick earnings that bitcoin seemed to offer.

During this time, Mt. Gox emerged as the largest bitcoin exchange in the world. Therefore, becoming one of the most visible sign of the bitcoin bubble. Until it filed for bankruptcy citing losses of tens of millions of dollars.

Experts believe that the lack of control and regulation in the bitcoin market makes it a highly risky investment. However, Mt. Gox claimed that it fell into bankruptcy because more than $450 million disappeared. They alleged that the money was stolen by hackers. However, investigators found that another $2.7 million were absent from the company’s bank account, for which its CEO Mark Karpeles was arrested.


Karpeles is still in the custody of Japanese authorities, and he has the right to file for “release pending trial” petition in the court. Whether he exercises this right or not remains to be seen. Although complete details of the prosecution’s case are not yet known, the odds are stacked against Karpeles as the conviction rate in Japan is nearly 99 percent. In the Silk Road investigation, Mark Karpeles came out clean. Let us see whether Karpeles can come out clean of this case as he came out of the Silk Road investigation.

Read More

Silk Road’s Lesser-Known Players

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Silkroad was, and still is in one form, an online black market. Silkroad dealt primarily in selling illegal drugs and was run and managed in such a way that it was possible to browse and purchase as an anonymous user, with high security measures put in place so as to limit traffic monitoring and spying. Many know of its founder Ross William Ulbricht, a.k.a. Dread Pirate Roberts, but less is known about his two secret employees, Variety Jones and Smed.

What Was Silkroad?


Silkroad was originally founded in February 2011, and derived its name from an old historical network of trade routes used between many countries including China, India and many European countries during the Han Dynasty. Many drug dealers and users would securely search the Silkroad website in order to buy and sell their illegal goods. Dread Pirate Roberts was the operator of Silkroad, a pseudonym derived from a character in the novel and movie The Princess Bride. Once public awareness of the Silkroad market grew, arrests and trials began emerging for many users and operators and eventually Ross William Ulbricht himself was arrested in October 2013. The Silkroad website was closed down, but since then other versions have emerged.

The Other Players

Of course it would have been an overwhelming job to operate and control the online drug market Silkroad all by himself as popularity and users grew, and so Dread Pirate Roberts hired a minimal team to support him. These would range from forum moderators to market administrators, and over the years most of these have now been apprehended. However, the two most important cogs in this well-oiled machine have never been publicly revealed.

Variety Jones

Variety Jones was a member of Silkroad since 2011, and dealt primarily in the selling of marijuana. Behind the scenes, however, it was revealed that he had a much more sinister role, according to Ulbricht as both a financial advisor and a mentor. It was even revealed that Variety was the one who suggested both the infamous pseudonym and Ulbricht’s first murder-for-hire attempt (however, no murder actually occurred). Variety Jones and another known as Smedley or Smed were revealed to be the driving force behind the business, discussing future ideas and projects without the involvement of Ulbricht at all.


The user known as Smedley began working on Silkroad at the beginning of 2012 and was hired for his coding abilities. He meticulously developed the infrastructure and was in talks with Variety jones to develop both an encrypted email network and service, and also implementing a bitcoin system for a more cryptic form of payment. In other words, it would appear that Variety Jones was the brain of the operation, working with Ulbricht to develop Silkroad into something much larger and more profitable, while Smed used his skills to develop their vision.

So as you can see, despite Ulbricht (Dread Pirate Roberts) receiving all of the publicity and responsibility for Silkroad and its operations, there were two other very important characters at work. Many attempts to trace these two figures have been made and speculation has been made as to their identities, but the FBI and DEA have never made an official statement regarding their identities and current whereabouts.

Read More

The Effect Of Silk Road On Bitcoin And Tor

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

The aftermath of Silk Road was that the Tor project and the Bitcoin were specifically used for illegal activities. Some people have even gone ahead to dismiss Bitcoin as a criminal tool while Tor as a tool used in the dark world of hackers to commit criminal activities. However, this was not the case when the two were discovered. Tor was originally designed by the US Naval Research Laboratory for the primary purpose of protecting government communications online. As for Bitcoin, it is a digital currency invented by Satoshi Nakamoto. It was meant to cover exciting uses that could not be covered by any previous payment system and most importantly was the fact that it was meant to be decentralized such that no institution controlled it.


When building Silk Road, getting the drugs was the easy part but the hardest part was discovering a way to sell the drugs online without being discovered by the authorities and this is how the site’s creator decided to settle for the Tor software. This was going to guarantee his invisibility in the web. This also allowed websites to be set under similar curtain of obscurity.

The second tool that came in handy was Bitcoin. With Tor alone, any customer could visit site and buy what they want without being tracked. However, the creator realized that some customer would want to pay for the drugs without having to send money through the mail. Bitcoin was the best option since the blockchain ledger on Bitcoin would indicate that the coins are moving but the recipient’s bitcoin address and the name will still remain anonymous on either end. Hence, the people involved in the trade will still remain unknown.

Silk Road

This is how the two ended up being the main tool used in Silk Road to carry out the trade of illegal drugs hence tarnishing their purpose.

Read More

30-Year-Old Man Used Silk Road for Selling Ecstasy To Pay Back A Debt

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Daniel Andrew Atkinson, 30, a gambling addict who studied a chemistry course and made illegal drugs, which he then sold via the darknet marketplace Silk Road, has been imprisoned for more than 8 years. Atkinson has admitted that he used the (old) Silk Road as a platform to sell hundreds of thousands of dollars’ worth of ecstasy.
Silkroad-market-screenThe District Court had heard that Daniel Andrew Atkinson had flee to Adelaide from the interstate due to his gambling debts and he had been threatened several times with physical violence – including an alleged drive by shooting – if he didn’t pay up.

In spite of the large the volume of illegal drugs sold, Atkinson’s lawyer David Edwardson, QC, submitted to the District Court that his client deserved leniency. He said that Atkinson is not an evil drug dealer who embarked upon a course of conduct just for pure greed and who couldn’t care less about the consequences of his actions. Daniel Andrew Atkinson had pleaded guilty to several counts of trafficking and manufacturing of illegal drugs.

sagnew_hrProsecutor Susan Agnew informed Judge Geraldine Davison that Daniel Andrew Atkinson had set-up a sophisticated drug manufacturing and trafficking operation that had netted him enormous profits. She told the court Atkinson, of Condowie had rented several properties in the central business district under false names and set-up pseudonyms on the Silk Road, the notorious website – that enabled people to sell and buy illegal drugs on an anonymous and secretive section of the internet that is known as the dark web. The Silk Road was shut down by the F.B.I. in October 2013.

The prosecutor said that the accused had been manufacturing and selling large amounts of illegal drugs for substantial profit and it had been an ongoing operation that involved a lot of effort on the part of the accused, who had studied a chemistry course, set-up false names and identifications and also rented premises under fictitious names.

Judge Geraldine Davison sentenced Daniel Andrew Atkinson to 8 years and 5 months in prison with a non-parole period of 3 years and 6 months after the time he had spent in custody was taken into account.

Read More