Silk Road Dark Web/Bitcoin Insanity Comes Full Circle With Charges Against DEA, Secret Service Agents

Some DEA and Secret Service Agents Helped Themselves to Silk Road Bitcoins:

The federal government became owners of one of the biggest troves of Bitcoin, thanks to seizing millions of dollars in the digital currency from criminals associated with the online black market Silk Road.

Two federal agents who helped lead one of several investigations in the case allegedly decided they wanted some of the money for themselves, according to a new federal court documents.

The two now-former agents from the Drug Enforcement Administration and the U.S. Secret Service are charged with wire fraud, money laundering and other offenses for allegedly stealing Bitcoin during the federal investigation of Silk Road, an underground illicit black market federal prosecutors shut down in 2013.

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More info here.

Yet Another Bitcoin Scam: Dark Web Market Evolution Disappears With $12+ Million Worth of Bitcoin

In the 18 months since the Silk Road online black market for narcotics was taken down by a swarm of three-letter agencies, a site known as Evolution has taken its place at the top of the dark web drug trade. Now Evolution, too, has suddenly dropped off the face of the internet. But unlike its Silk Road predecessor, there’s no indication that law enforcement took down the newer black market. Instead, it’s simply, mysteriously vanished—with rumors swirling that its own administrators may have run off with many millions of dollars of its users’ drug money.

Over the past weekend, the massive anonymous market known as Evolution halted withdrawals of bitcoin from its website, telling users that it was dealing with technical difficulties. Then on Tuesday evening, both its market and user forum went offline, with no opportunity for drug buyers and sellers to pull out the funds they had stored in their Evolution accounts. The result has been a wave of panic that’s shaken the online black market economy as much as any of the law enforcement drug busts of the last two years.

Late Tuesday, a Reddit user named NSWGreat who had earlier self-described as an Evolution drug dealer and “public relations” staffer —he or she had even hosted an “ask me anything” session about the job days earlier—wrote a post to Reddit’s darknet markets forum that claimed to confirm Evolution’s administrators had in fact shut down the site’s back end too, and escaped with users’ money; NSWGreat described confronting Evolution’s two pseudonymous owners, Verto and Kimble, who he or she says then admitted they were closing the market and stealing its funds. “I am so sorry, but Verto and Kimble have f–ked us all. I have over $20,000 in escrow myself from sales,” NSWGreat wrote. “I’m sorry for everyone’s loses, I’m gutted and speechless. I feel so betrayed.”

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Two More Darkweb Sites Seized

A full-blown dark web drug crackdown is in the works, and it’s not stopping with the Silk Road.

On Thursday the FBI along with other law enforcement agencies including the Department of Homeland Security and Europol announced that it had seized the Silk Road 2, perhaps the most well-known drug market to appear on the Dark Web since the takedown of the original Silk Road last year. What it didn’t announce is that at least two other drug market sites have also been busted, and more takedowns are likely coming. The drug markets Hydra and Cloud 9 now both display the same “This Hidden Site Has Been Seized” notices as the Silk Road 2, emblazoned with the logos of the FBI and Europol. Several other popular dark net markets were down Thursday morning, as well, though they didn’t display that banner. An FBI spokesperson tells WIRED that there will be more than three market seizures in total, with the full extent of the operation set to be revealed by Friday.

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Silk Road 2 Seized by FBI

A year after the Silk Road 2 came online promising to revive the Dark Web drug trade following its predecessor’s seizure by the FBI, the sequel has suffered the same fate.

On Thursday international law enforcement agencies including the FBI, the Department of Homeland Security and Europol took down the Silk Road 2 and arrested its alleged operator 26-year-old Blake Benthall in San Francisco. Benthall, who is accused of running the new Silk Road under the handle “Defcon,” has been charged with narcotics trafficking, as well as conspiracy charges related to money laundering, computer hacking, and trafficking in fraudulent identification documents. The criminal complaint against him alleges that the Silk Road 2 sold hundreds of kilograms of drugs of every description to hundreds of thousands of buyers around the world, with bitcoin-based sales of more than $8 million per month at the time of its seizure.

“Let’s be clear – this Silk Road, in whatever form, is the road to prison,” Manhattan U.S. attorney Preet Bharara wrote in a statement to the press. “Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don’t get tired.”

Benthall appeared in a San Francisco court Thursday morning, where he had a bail hearing scheduled for tomorrow.

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