FBI raids alleged online drug market Silk Road, arrests owner

....Do they actually have the physical servers in their possession? if so how did they find them?
One would have though that this would have been picked up much earlier considering the resources of the state. 3 possibilities come to mind

Everything is as it's said to be , true as portrayed by the media
DPR was known by LE much earlier on it was allowed to continue as honeypot to gain insight/data/sources.
The whole thing was pre-orchestrated and created by LE with these slip-ups intentional and discovered and the whole thing shut down when enough intel was gathered......

I think the location/providers of the end nodes (servers) would be something DPR would have to hand-over. Failing (or previous to) that, one of the security flaws did include the last hop from intermediate node to server (exact technical details are failing me right now though - been up all night :? )

I'd guess a combination of your last two! :) Intelligence gather is their modus operandi, a honeypot (be it virtual or in real life [what's called social engineering]) is a quite large possibility imo.
 
Sorry if this has already been posted -

Silk Road Kingpin Apparently Hid a Stash of $80 Million in Bitcoin

Ross Ulbricht, the recently arrested mastermind behind Silk Road, appeared in court today where his lawyer begged for more time before the detention hearing. The judge said he didn't "know what you're going to accomplish in the next several days." Maybe move some of his massive stash of hidden Bitcoin?

Forbes' Kashmir Hill just published details about the fate of the 26,000 Bitcoin that the FBI seized from Silk Road when they shut it down. At the time of the arrest, that was $3.6 million worth of the crypto currency, but it's pennies compared to what Ulbricht apparently stashed away as commission. Hill reports:

The spokesperson says the approximately 26,000 Bitcoins seized are just the ones that were held in Silk Road accounts. In other words, it’s Silk Road users’ Bitcoin. The FBI has not been able to get to Ulbricht’s personal Bitcoin yet. “That’s like another $80 million worth,” she said, explaining that it was held separately and is encrypted. If that is indeed what he’s holding, that’s close to 600,000 Bitcoin all together or about 5% of all Bitcoin currently in existence.

That's insane. It's, like, insanity of the batshit variety. Nuts! If true—and assuming Bitcoin doesn't totally crash—this 29-year-old hipster managed to hoard 5 percent of all Bitcoin in existence, and it might never be found. So he could just do a few years in the slammer, come out and dig up a virtual fortune then go chill on a boat in Mexico for the rest of his life. It'll be like The Shawshank Redemption except with fewer redemptive qualities.

About the measly $3.6 million in Bitcoin the FBI is holding, they're going to keep holding it until the trial is over. They've got a wallet set up and everything. So who says the government's no good at cybersecurity? Oh yah, the president. [Ars, Forbes]

With comments -

http://gizmodo.com/silk-road-kingpin-apparently-hid-a-stash-of-80-million-1441291682
 
The government created the internet and they created most modern encryption. They release stuff to the public after they have new stuff that will render it outdated.

Not pessimistic in the slightest.

Let's ignore the independently developed cryptography... e.g. the independent discovery of differential cryptanalysis, Rijndael and the NIST competition algorithms, etc. And the fact that the algorithms have been beaten on by academics all these years but nobody's found a flaw capable of breaking them - yet.

The US Gov actually uses the "commoner's crypto" - RSA and the like, for a large amount of their data... because distributing the NSA Suite A algorithms to government employees without a security clearance would result in the genie leaving the bottle.

Either way, the problem is not the cryptography. Very rarely is it ever. The problem is implementing it. Key mangement and the like is the other half of the puzzle, and it's equally as important. if someone knows the key to your "unbreakable" cipher, or if they can just sneak into your office and read the cleartext while you're in the bathroom... your million-dollar NSA algorithm is useless.

The human element is always the weakest link. Ask Kevin Mitnick about it!

Also, welcome to the new era of digital pirate gold?
 
The Race to Create Silk Road 2.0

Whilst many vendors and buyers have migrated to Silk Road’s two remaining competitors, Black Market Reloaded and Sheep Marketplace, other members have been working around the clock to develop and launch Silk Road 2.0.

Ex-Atlantis mod, Heisenberg2.0, claims to have counted “at least 5 publicly stated projects with the said aim of becoming “Silk Road 2.0″ and many more gathering info and building alliances.”

The main contenders are a team of trusted and verified Silk Road vendors who are working together to recreate the black market virtually identically. A forum has already been created that mirrors the original and its members have been given a sneak peek at the layout of the new marketplace, which will operate under the same philosophy and rules as the old one.

The difference this time is that rather than a single figurehead, there is a team involved right from inception and they are considering allowing it to be open source. The team has a variety of backgrounds, from development to programming to marketing. Vendors of Silk Road are verifying themselves by PGP signing their introductions and the administration claims to be “90% there” with the new site, with the server up and ready to go.

No doubt there will be some beta testing of security and functionality, but it is likely we will be seeing the new Silk Road within a week.

http://allthingsvice.com/2013/10/06/the-race-to-create-silk-road-2-0/
 
Silk Road Subdued But This Ex-Black-Market Employee Believes Feds Only Woke A Monster

So the gig is up, My two favorite Drug dealers have been taken down in the space of a week, Christopher Tarbell is now the mystery agent who infiltrated Silk Road and can add Dread Pirate Roberts to his list of take-downs which include “Sabu” of Anonymous.

While other sites ramp up server capacity to meet demand and I watch the number of listings on alternative marketplaces such as Sheep and Black Market Reloaded increase at an exponential rate, (Sheep has gone from 500 Drug listings to over 1500 as I write) I can’t help but get the feeling DPR would be relatively happy with the results of his self-professed “economic simulation” as his legion of vendors and customers scramble to re-establish contact on other marketplaces.

There’s also a hint of Karma in the air too, had the Admins behind the failed Silk Road alternative “Atlantis” kept the site alive just two more weeks they’d be swimming in a sea of bitcoins Scrooge McDuck style right now but given the allegations of ex black marketplace employees having hits put out on them maybe I’ll tone down on the criticism and just be glad I was never on the inside.

SR-2.png


how-to-build-new-SR.png


As if there wasn’t enough suitors ready to rise to the challenge of being the next DPR, to make it easier there is already a functioning open-source project know as BitWasp which can simply be downloaded and installed on an onion web server and the next SilkRoad is (almost) ready to go. Below is a short description of the project from its facebook page where they make no secret of the fact the project aims to aid the development of future anonymous marketplaces flowing in the case of busts like just happened Silk Road.

Since I’m sure more will come to light in the next few days with a court date scheduled for 4th October (Today) It seems pointless to speculate just yet but It looks like they had him from the very first posts he made announcing the launch of Silk Road under an account registered to [email protected]. What’s surprising to me and may be encouraging to many others is given his sloppiness, how did it take so long for him to get caught?? While I didn’t have a very long career working with Atlantis the very first thing I did (after learning a bit more about security on the job) was go back and make sure I didn’t make any noob mistakes.

Either DPR assumed mistakes made in the past would have caught up with him already or his plan to allude to the fact ownership of the site has changed hands from the original founder in a Forbes interview last month were too little too late as the investigations into the original creator of the site were already well under-way. In any case right now we are presented with one Dread Pirate Roberts AKA Ross Ulbricht whose Linkedin/Youtube/Facebook would suggest this is the same guy who founded Silk Road as well as the administrator at the time of closure.

Had Ross Ulbricht practiced what he preached, I believe he would be a free man today but after looking into the technical analysis by forum members on other black markets it’s speculated things were never as secure as Dread Pirate Roberts made them appear. It’s funny how the internet can turn on you, many of DPR’s greatest advocates have now become his greatest critics with some irate vendors having lost six figure sums claiming if he gets out of prison he may be next in line for a hit.

More at -

http://atlantisblog.org
 
Hmm, apologies! tl;dr

sekio, words of wisdom!

The second quote is just me rambling on about the human influence on network/system security - I could obviously ramble on the topic for ages. :D

----------------------------

....Let's ignore the independently developed cryptography... e.g. the independent discovery of differential cryptanalysis, Rijndael and the NIST competition algorithms, etc. And the fact that the algorithms have been beaten on by academics all these years but nobody's found a flaw capable of breaking them - yet
.....
Either way, the problem is not the cryptography. Very rarely is it ever. The problem is implementing it. Key mangement and the like is the other half of the puzzle, and it's equally as important. if someone knows the key to your "unbreakable" cipher, or if they can just sneak into your office and read the cleartext while you're in the bathroom... your million-dollar NSA algorithm is useless.
.....

Welcomed words of wisdom (not to say that other posts weren't of course! :) ) Cryptology/cipher advancements - well not these says - aren't directed by some covert, men in black, Government officials sequestering the top-minds. Not to say Government cryto- programs don't exists, (afaik) R&D largely comes out of Universities (PhD's and research specialists/advisors) and security organisations (ie, OWASP: to note open source (for which there are many in the same mentality. Kind of what "old hippies" would preach - PLUR - just 2013! or WhiteHat Security) .... that's not to deny Government don't provide funding (One would assume less so for profit organisations however).

You mention NSA, this is one of the best encryption algorithms known. Once encryption has performed, it is near impossible to decrypt without the public key, I'm most definitely not cipher/high level mathematician but having to studied the RSA algorithm (I might do a little revision); as with most innervations it's beauty is in it's simplicity!

RSA (algorithm) - encryption and decryption really aren't that a difficult processes. It's due to a curious feature of mathematics when two prime numbers are multiplied, it is very difficult to factor, that is to work out, the two original numbers. Mathematicians have been trying to find a way to do this quickly for hundreds of years and have failed so far. The agreement on key generation seems to be the difficult bit; the use of strong (every increasingly long) primes and the basic mod function is what decrypts it (and over simplification I'm sure).



....The human element is always the weakest link. Ask Kevin Mitnick about it!
.....

^^^ Listen to reason. (not really a "new" field of security now days, although one of the newest) Crackers* specialise, and one speciality is that of social engineering. Crackers* now realise technology - especially with a closed/air gap** network configuration - for anyone/group (excl. movements such as Anonymous) is unattainable using old methodologies (a nerd at a terminal, service/port/idle scanning/portsweeping [call it what you will] on an IP for vulnerabilities. DDoS attacks/taking down a server used to consist of just sending a packet greater than what the protocol could handle .... it was that simple those days) so creative alternatives were concocted; social engineering - essentially using one's charisma/charm to pull as much information from whatever source you can, finding a "weak link" in the chain (a [new] receptionist, confidence [handling oneself such that one should be there and not out of place], forged ID, knowing and convincing someone on the inside .... I think you get the idea.

As sekio said, the human element is, and will always be the weakest link in any system! Which is why regular and up to date training for all employees is a must, developers/testers must be on the cutting edge of any flaw(s) in their own software (a comprehensive SDLC should include extensive testing [however the degree of testing/debugging depends on the specific SDLC chosen] to reduce these numbers), external SQA audits, utilisation of testing tools, and many many more steps can be put in place in mitigate software/system/infrastructure/etc. issues.


* A cracker is the real term for what the media have grabbed hold of and called "hackers".
** An air-cap network/computer is one in which there are absolutely no connection to the outside world. The system is stand-alone and does not have any connections to the Internet/VPN/etc.
 
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The Race to Create Silk Road 2.0

Whilst many vendors and buyers have migrated to Silk Road’s two remaining competitors, Black Market Reloaded and Sheep Marketplace, other members have been working around the clock to develop and launch Silk Road 2.0.

Ex-Atlantis mod, Heisenberg2.0, claims to have counted “at least 5 publicly stated projects with the said aim of becoming “Silk Road 2.0″ and many more gathering info and building alliances.”

The main contenders are a team of trusted and verified Silk Road vendors who are working together to recreate the black market virtually identically. A forum has already been created that mirrors the original and its members have been given a sneak peek at the layout of the new marketplace, which will operate under the same philosophy and rules as the old one.

The difference this time is that rather than a single figurehead, there is a team involved right from inception and they are considering allowing it to be open source. The team has a variety of backgrounds, from development to programming to marketing. Vendors of Silk Road are verifying themselves by PGP signing their introductions and the administration claims to be “90% there” with the new site, with the server up and ready to go.

No doubt there will be some beta testing of security and functionality, but it is likely we will be seeing the new Silk Road within a week.

http://allthingsvice.com/2013/10/06/the-race-to-create-silk-road-2-0/


There is absolutely no need to create another SR v 2.0, at least not with the name, and with the same ego filled idiot at the top. There's a hidden service right now that is pretty worth it and they are already making i2p mirrors right now. Tor might be scrutinized, but my understanding is that i2p is several magnitudes more complicated to eavesdrop in.

Not that I'm about to use it, if I ever do, it will be after a lot of this craziness has gotten off the media and when the news is focused on the USA maybe bombing some remote place...8)
 
Just a heads up for anyone who happens to try either of the current alternatives, or is thinking about doing so -

Some scammers are using trusted Silk Road vendor names on the alternative markets
 
Can I ask people what their view is of Atlantis? It seemed more than highly suspicious that they shut down just before the SR bust, certainly enough suspicion to consider them being an FBI front. But now above this post we have quotes from their blog/forum saying viva la revolution part 2.

Thoughts?
 
Have there been any confirmed buyer raids? I'm wondering whether they have bothered. Surely it's too late now, anyone with half a brain has cleaned up.
 
My thoughts on Atlantis, Is that it was not actually 'affiliated' with FBI or any LE for that matter. Why would they shut down before the bust? They would've known after the busy that traffic and vendors would be flowing to Atlantis, so then they could've taken down more of the bigger dealing vendors, and gathered more evidence on them.
My guess is they were working through both sites, and new that some of the former SR employees were involved with Atlantis, and 'bribed' them into shutting down, so tey could close the books on their investigation which involved both sites. So my thoughts are they told admin's at Atlantis either you cooperate or we'll find or destroy your site and integrity and then lock you up and throw away key!?

I'd like to hear any other opinions as well in this matter. Because there are a few other Black Market sites out there as well, but my understanding Atlantis had some ties with SR.
 
By saying (or rather, typing) this, I am in no way attempting to insult ordinary Americans (I got beef with the government and their antiquated drug policy), however, this is probably the fundamental reason as to why I am so glad I do not live in the US (anymore). Way too much heat. Not that north of the border (the conservative government ideology) is much better. Now Switzerland, that would be nice.
 
By saying (or rather, typing) this, I am in no way attempting to insult ordinary Americans (I got beef with the government and their antiquated drug policy), however, this is probably the fundamental reason as to why I am so glad I do not live in the US (anymore). Way too much heat. Not that north of the border (the conservative government ideology) is much better. Now Switzerland, that would be nice.

Depends one what part of the US you are in, the country is so large that as far as local policy different areas are well.. very different.

but yeah I would love to move up to Toronto or Vancouver. Going to seriously look for work up there when I finish graduate school to be honest. Canada's current government is not that much better then ours TBH.
 
Have there been any confirmed buyer raids? I'm wondering whether they have bothered. Surely it's too late now, anyone with half a brain has cleaned up.

Still think they are likely looking analyzing the data to see if any of the large scale vendors were sloppy which could all them to use info to setup investigations on sources etc etc.
Point is, we still do not know. I do have to say, the amount of people that appear to already be looking to find the next market surprises me, especially if they have been making purchases on the previous one.
 
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....Still Point is, we still do not know. I do have to say, the amount of people that appear to already be looking to find the next market surprises me, especially if they have been making purchases on the previous one.

Firstly, the/a drug market will always be in effect imo. Whether this be highly technological - such as SR or on the street corner. What changes is the modalities; as longs as there's buyers, there will be sellers - and so the circle perpetually continues (with imo very little disregard to LE)
 
Still think they are likely looking analyzing the data to see if any of the large scale vendors were sloppy which could all them to use info to setup investigations on sources etc etc....

Agreed! (Surpringly to some?) the response will In actual fact be a highly collaboration one especially in terms of the data retrieval; between statisticians and database architectures (in addition to a multiple disciplinary team; economist, software developer, diplomats, etc) toward any form of successful data processing of this magnitude which requires all of these in order to "successfully" extract "useful" information.
 
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Not pessimistic in the slightest.

Let's ignore the independently developed cryptography... e.g. the independent discovery of differential cryptanalysis, Rijndael and the NIST competition algorithms, etc. And the fact that the algorithms have been beaten on by academics all these years but nobody's found a flaw capable of breaking them - yet.

Not that we the public know of. The intelligence industry is a multi billion dollar industry that the public knows little about and what we do know is mostly what they want us to know.

I just think it is foolish for people to think they are safe depending on a technology they think is above the enemy. Especially when the enemy created most of it.

Also, welcome to the new era of digital pirate gold?

Agree.. their was a lot of money made plenty enough to make more people take the risk.
 
You've got border issues? Try living on an island with the world's strictest importation/custom laws in the world! No chance! 8o

I know from past SR forum browsing that AUS has extremely thorough import checks. Many vendors stopped selling/shipping their products to Australian buyers because of this (the packages were intercepted on too many occasions). I can only imagine how frustrating that must have been (many Aussie buyers lost a lot of money).

Then there's the whole video game rating system which has caused a number of games to either be censored or banned completely from being sold. One example I can think of is Fallout 3. One of the in-game consumables (a med pack) had to be renamed from 'Morphine' to 'Med-Ex' or it would be banned. Incredibly stupid for a very-mature-themed game, but whatever.
 
I know from past SR forum browsing that AUS has extremely thorough import checks. Many vendors stopped selling/shipping their products to Australian buyers because of this (the packages were intercepted on too many occasions). I can only imagine how frustrating that must have been (many Aussie buyers lost a lot of money).

Then there's the whole video game rating system which has caused a number of games to either be censored or banned completely from being sold. One example I can think of is Fallout 3. One of the in-game consumables (a med pack) had to be renamed from 'Morphine' to 'Med-Ex' or it would be banned. Incredibly stupid for a very-mature-themed game, but whatever.

I totally forgot about that whole fallout issue... cannot wait for the next one. Sorry... off topic I know.
 
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