An Australian drug dealer has become the first person to be convicted of a Silk Road-related crime, after using the black marketplace to buy a stash of MDMA, amphetamine, marijuana and cocaine.
People can buy goods from Silk Road only by connecting with the anonymising Tor network and using Bitcoins. The marketplace has very few restrictions on what people can sell, but is largely used for trading drugs. An August 2012 study by security researchers at Carnegie Mellon University revealed that the Silk Road trades items worth £1.22 million every month.
According to a report in The Age Paul Leslie Howard used Silk Road to buy and import the illicit drugs on 11 different occasions. Australian Customs and Border Protection Service officers in Melbourne and Sydney examined mail -- most of which came from the Netherlands and Germany -- destined for his home. They found 46.9 grammes of MDMA and 14.5 grammes of cocaine. The federal police then raided his house in July 2012 and found digital scales, ziplock bags, $2,300 (£2,000) in cash, 35 stun guns disguised as mobile phones and a money counter. They also found two working mobile phones, and forensically analysed more than 20,000 text messages. In amongst them were incriminating texts such as "I got five grand worth if you want" and "promote the LSD I got more in. I sold 200 cubes last week".
Howard has pleaded guilty to two charges of "importing a marketable quantity of a border-controlled drug", which carries a maximum jail term of 25 years. He also pleaded guilty to possessing controlled weapons. During the trial he said that he had been drawn to the site after reading an article by a journalist called Eileen Ormsby, who regularly covers the Silk Road in Australian newspapers. Since Howard's conviction, the Silk Road has warned its users via its Twitter account not to follow their feed nor the feed of Ormsby with their real names.
Prosecutor Morgan Brown made it clear that the authorities had a lot of information about Howard from the Silk Road, including access to his profile, which he registered under the name Shadh1 in April 2012. He set up a vendor's account offering up cocaine and speed and saying that he is looking to "branch into more as I get more coin back in my pocket".
At the time of Howard's arrest, the Australian Federal Police and the Customs and Border Protection Service issued a warning to any would-be drug traders using supposedly anonymous marketplaces such as the Silk Road saying they could be identified by police techniques.
AFP manager of crime operations Peter Sykora said in a statement: "Criminals are attempting to exploit the international mail system through online networks, but the recent arrest demonstrates that we are one step ahead of them. The AFP will continue to identify, investigate and prosecute individuals or groups importing narcotics into Australia, including via illicit ecommerce platforms such as Silk Road."
Australian police aren't the only ones to crack down on the Silk Road. The DEA in the United States is also on the warpath, targeting similar sites such as the Farmer's Market. In July 2012 the organisation told a US news station KXAN that it was investigating the Silk Road and in November 2012, DEA spokesperson Rusty Payne told The Verge when quizzed on the Silk Road: "Typically we're not really giving out investigative updates about what we're doing, but it's safe to say we are heavily involved in looking into that." In the UK, the Serious Organised Crime Agency and the Metropolitan Police E-Crime unit have also been digging into the marketplace.
However, despite all of these investigations, the conviction rate isn't looking all that promising for law enforcement.
Don't miss: Study: Online marketplace Silk Road sells £1m worth of drugs each month
