Silk Road 2.0, the resurrection of the original Silk Road has been seized by the joint law enforcement of the FBI, ICE Homeland Security, and European law enforcement agencies acting through Europol and Eurojust.
The combined efforts of international law enforcement groups, now known as “Operation Onymous”, involved shutting down 27 sites, and seizing 400 URLs, in 17 countries. The alleged proprietor of Silk Road 2.0, Blake Benthall, was targeted by Operation Onymous.
Benthall faces a long list of charges. According to the complaint, Benthall will be charged with: Conspiring to commit narcotics trafficking, conspiring to commit computer hacking, conspiring to traffic fraudulent identification documents and money laundering. Benthall has plead guilty, and should he be convicted, looks to be facing a long time in prison.
“As alleged, Blake Benthall attempted to resurrect Silk Road, a secret website that law enforcement seized last year, by running Silk Road 2.0, a nearly identical criminal enterprise. Let’s be clear—this Silk Road, in whatever form, is the road to prison. Those looking to follow in the footsteps of alleged cyber criminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don’t get tired.” – Manhattan U.S. Attorney Preet Bharara, release from U.S. Attorney’s Office.
The “War on Drugs” has proponents on both sides. The Pew Charitable trust summarises three points regarding the effectiveness of incarceration:
"The first, sometimes referred to as the ‘replacement effect,’ applies largely to crimes that occur as part of a market, such as fencing stolen property or, most notably, drug transactions. Once incarcerated, drug dealers tend to be quickly replaced by new dealers and, as during the crack epidemic, the new recruits can be younger and more prone to violence than their predecessors. Thus while drug dealers no doubt deserve punishment, most leading researchers, and many law enforcement officials, now agree that incarcerating the foot soldiers in drug gangs, not to mention drug users, has a negligible impact on crime. Moreover, by creating job openings in drug-dealing organizations, it draws more people into criminal lifestyles and may in certain cases exacerbate crime." – The Pew Charitable Trusts, March 2009
In October 2013, Ross Ulbricht, the alleged drug kingpin of the original Silk Road was the first of these darknet arrests. In the quiet of a San Francisco library he was arrested and escorted to jail with handcuffs biting his wrists. The complaint filed against Ulbricht makes for a likely procedural precedent, the difference is that Ulbricht has plead not guilty.
It is believed by some that these sites actually facilitate a decrease in crime rates. A paper released in May 2014 this year entitled, “Not an ‘Ebay for Drugs’: The Cryptomarket ‘Silk Road’ as a paradigm Shifting Criminal Innovation.”, argues that there is less of a chance for violent confrontation, saying “With Silk Road functioning to considerable degree at the wholesale/broker market level, its virtual location should reduce violence, intimidation and territorialism.” The paper is by Judith Aldrige, University of Law and David Décary-Hétu, and she argues that violence is rendered obsolete, as the breakdown of borders eliminates turf wars.
Ulbricht’s trial is set to take place January 2015. Many of his supporters believe that Ulbricht is the target of an unfair legal inquisition, and his defense says that the terabytes of server data have been unlawfully procured and are in violation of Ulbricht’s Fourth Amendment rights.
Movements such as FreeRoss.org have been campaigning for donations from the public in order to support Ulbricht’s defense. Many have donated directly, including “Bitcoin Jesus” Roger Ver. Indiegogo had a crowdfunding campaign: “We are a coalition of individuals, organizations and businesses that believe the outcome of Ross Ulbricht’s case is tremendously important for the future of Internet freedom, user privacy and cryptocurrency regulation. .” Free Ross, Idiegogo.
OpenBazzar, currently in Beta testing, provides a peer to peer, decentralized market place that aims to be the eBay of the future. Built on the ideologies and technical prowess of the Bitcoin protocol, this market may well prove to be the turning point in global drug policy. OpenBazzar offers a platform that may be impossible to shut down.
The Cato Institute Report, The Budgetary Impact of Ending Drug Prohibition, estimates that legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. The report also estimates that drug legalization would yield tax revenue of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco.
The transparency of financial transactions on any blockchain based platform does indeed lend itself to auditing and taxation. However, the moral implications of the illicit drug trade cannot be quantified monetarily.
B.Holmes, author of The Range of Illusion and The Private Key installments, is currently located in Thailand, researching and writing about crypto. You can follow B.Holmes on twitter @BanteringB, or contact via email: [email protected]