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Feds Shutter Illegal Drug Marketplace Silk Road 2.0, Arrest 26-Year-Old San Francisco Programmer

This article is more than 9 years old.

By Ryan Mac, Kate Vinton and Kashmir Hill

Another year, another dark web takedown.

A year ago, the FBI shut down Silk Road, an anonymous online narcotics website that generated $1.2 billion in sales, and arrested its alleged creator Ross Ulbricht in a San Francisco library. On Thursday, the FBI announced that it has done it again, seizing Silk Road successor Silk Road 2.0 and detaining 26-year-old Blake Benthall in the same city. Silk Road 2.0's seizure comes amid reports of various other anonymous narcotics marketplace shutdowns on Thursday as global authorities look to be cracking down on illegal dark web operations.

“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," said Preet Bharara, U.S. Attorney for the Southern District of New York, in a statement. "Let’s be clear–this Silk Road, in whatever form, is the road to prison."

Bhara, the FBI and the Department of Homeland Security allege that Benthall was "Defcon," the online administrator who anonymously ran Silk Road 2.0. That site, which could only be accessed using online anonymity software Tor and is now inoperative, was said to be selling $8 million-worth of banned opiates, marijuana and other illicit goods a month with 150,000 active users by September.

The shuttering of Silk Road 2.0 is the latest in the whack-a-mole pursuit of illegal dark web drug marketplaces that have emerged since the abrupt end of the original Silk Road last year. At least 18 other operations have emerged since the FBI shut down the first Silk Road, according to DeepDotWeb, fulfilling a need among worldwide users for open access to narcotics and other illegal goods. On Thursday, users of other drug marketplaces including Hydra and Cloud9 reported seeing FBI seizure notices, pointing to a coordinated sting operation against such contraband sites.

An FBI spokesperson declined to comment on the closures of other drug marketplaces outside of Silk Road 2.0.

Silk Road 2.0

Silk Road 2.0 was opened for business exactly one year ago, by an administrator known as the "Dread Pirate Roberts," the pseudonym that authorities said was also used by alleged original Silk Road leader Ulbricht. “You can never kill the idea of Silk Road,” the new Dread Pirate Roberts tweeted twenty minutes before the site’s official launch on Nov. 6, 2013.

In its early months, Silk Road 2.0 experienced numerous problems, including the arrest of prominent moderators, and a February hack that allowed a seller to take advantage of a flaw in the site's code to steal what amounted to $2.6 million in Bitcoin.  The FBI in its report alleged that Defcon took over Silk Road 2.0's operations in December, overseeing everything from its computer infrastructure to its forum moderators to the "massive profits generated from the operation of the illegal business."

“I didn’t run with the gold,” wrote Defcon following the Silk Road 2.0 hack. “I have failed you as a leader, and am completely devastated by today’s discoveries… It is a crushing blow. I cannot find the words to express how deeply I want this movement to be safe from the very threats I just watched materialize during my watch.”

Silk Road 2.0 seemed to recover from that hack and had more than 13,000 listings for narcotics such as ecstasy and psychedelics as of October. Authorities said that the site had facilitated the transaction of hundreds of kilograms of drugs and the laundering of millions of dollars, though it seemed well short of the $1.2 billion in sales that the original Silk Road achieved during its lifetime.

Who is Blake Benthall?

Intriguingly, Benthall, who could face life in prison if convicted on charges including conspiracy to commit narcotics trafficking, shares various similarities to Ulbricht, the alleged creator of the first Silk Road. Like Ulbricht, Benthall hails from Texas and was arrested while living and working in San Francisco. One neighbor at Benthall's residence in the city's Mission district said that FBI agents were in the backyard of the residence last night and had cordoned off part of the street.

According to his various social networking pages, Benthall came to San Francisco for work around 2009 after attending Florida College, a private Christian school in Temple Terrace, Florida. His LinkedIn page notes that he worked for various Bay Area tech firms in engineering positions, typically staying a few months at each job. Most recently, he worked at a web and mobile development company Carbon Five and spent six months as a flight software engineer for Space Exploration (SpaceX) Technologies in Los Angeles.

A spokesperson for SpaceX confirmed that the complany employed Benthall from Dec. 2013 to February, but did not provide additional details. Mike Wynholds, CEO of Carbon Five, said that Benthall worked at his firm's San Francisco office from Dec. 2012 to March 2013 as a full-time contractor before leaving on good terms to address "family issues."

"He was nice guy but wasn’t super idiosyncratic in any way," said Wynholds, who interacted with Benthall a few times a month and said he found out about his former employee's arrest through the news. "He was a good developer, very friendly... It's a big shock to hear this."

Benthall most recently worked for himself at Codespike, a technology incubator he ran out of his San Francisco home, according to business records. He called himself a "Bitcoin dreamer" on his Twitter page and left a wide digital footprint online. The criminal complaint against Benthall said that he bought a $127,000 Tesla Model S in late January, making a $70,000 down payment in Bitcoin.

"Who are the most libertarian people you know?" he wrote in a Facebook post in August. "I want to meet them"

"[I'm] working on something I want to share & involve more people in!" he added, in responding to friends on the post. "On the edge of launching a very libertarian finance startup."

Calls to the phone number listed on Benthall's business records were not returned. Phone calls to his parents in Houston also went unanswered.

Authorities said that they were able to arrest Benthall after an undercover Homeland Security agent was able to gain the trust of Silk Road 2.0's administrators and received access to "private, restricted areas" of the site reserved for its leaders. Through that operation, the agent said he was able to interact directly with Defcon.

That agent detailed his investigation in full in the criminal complaint against Benthall, noting that he had attained moderator privileges on a forum that formed after the closure of the original Silk Road site. On that forum, the agent was able to see discussions between users who toyed with the idea of creating a successor site.

In May, agents were able to locate the server hosting Silk Road 2.0 in a foreign country, tracing alleged ownership back to Benthall. As the agent wrote: "Based on a review of records provided by the service provider for the Silk Road 2.0 Server, I have discovered that the server was controlled and maintained during the relevant time by an individual using the email account blake@benthall.net.”

Benthall’s arrest came shortly after reports that Irish police apprehended two drug trafficking suspects in Dublin earlier on Thursday in an international operation between FBI and Europol called "Onymous." The two men who were arrested were in their 30's and had 180,000 Euros-worth of drugs and between 1.5 million and 2 million Euros-worth of Bitcoin on computers seized during a raid. The Onymous operation reportedly ends on Friday.

Benthall, who appeared in a San Francisco court on Thursday unshackled and in street clothes, faces charges of conspiring to commit narcotics trafficking, conspiring to commit computer hacking, conspiring to traffic in fraudulent identification documents and money laundering conspiracy. Those are similar to the charges leveled at Ulbricht, who has pleaded not guilty on seven different counts and is set to begin his trial in January. He is currently being held at a federal detention center in Brooklyn and will appear in court for his final pre-trial conference on Dec. 17.

With reporting from Alex Konrad, Frank Bi and Sue Radlauer in New York and Ellen Huet in San Francisco. 

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