A Silk Road to total freedom?

Or to total thuggery? The dark side of Internet culture's obsession with anonymity.

By , Staff writer

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    Come buy, come buy: 'Apples and quinces, Lemons and oranges,' and (perhaps) other, more bitter, fruit. Sometimes poison to the blood.
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In 2010, Ross Ulbricht, a ferociously bright young man working at the edge of material science at Penn State, walked away from his budding research career for what he felt was a nobler application of his energies: a quest for utopia.

On his LinkedIn page, he explained that in the five or so years since he'd earned a bachelors degree in physics from the University of Texas at Dallas "my goal during this period... was simply to expand the frontier of human knowledge." He now had grander plans:

Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and agression (sic) amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.

That passage would be familiar to anyone who's ever participated in the online forums where the Internet's seemingly endless supply of techno-libertarians roam free. A young, technically-competent young man with a hard science or engineering background, issuing his digital Randian yawp: "I'm going Galt, and I'm going to reshape the world!"

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The vast majority of the time, the vow is just bluster. But if the FBI is to be believed, Mr. Ulbricht not only followed through, but did so by burrowing deep into the dark underbelly of digital commerce, earning vast fees for himself and learning a fair bit about violence and coercion into the bargain. Going by the Internet handle "Dread Pirate Roberts" (the name of the semi-mythical scourge of the high seas from 1987's The Princess Bride), he founded the lawless and secretive online marketplace Silk Road, which relied on the virtual Bitcoin currency and the world's legions of drug dealers, credit-card thieves, and money launderers for traffic.

Before he was exposed as Ulbricht, "DPR" dressed up his activities in the same high-minded rhetoric found on his LinkedIn page. For instance, in August of this year, he gave an online interview to Forbes.

In addition to apparently falsely claiming that he was not Silk Road's founder (a nod to The Princess Bride; while the fearsome Dread Pirates Robert was thought to be one man, he was actually a succession of men who made their fortunes and then retired, passing the mantle on to a successor) he laid out his philosophy of the state as ogre.

"At it’s core, Silk Road is a way to get around regulation from the state," he told Forbes. "If they say we can’t buy and sell certain things, we’ll do it anyway and suffer no abuse from them. But the state tries to control nearly every aspect of our lives, not just drug use.. If it wasn’t clear before that the state is your enemy, it should be now that the biggest covert intelligence agency in the biggest government on the planet has been stealing nearly everyone’s private communications. We have the technology right now to make this impossible for them."

Ulbricht took in roughly $80 million in fees while processing over $1 billion worth of transactions until his site was shut down this week, after months of US government infiltration of the site and its practices. FBI agents tailed him to a library in San Francisco, waited until he'd logged into his computer and entered his passwords and then pounced - making their arrest and getting access to all of the transactions and logs he'd boasted in online forums as "DPR" they'd never be able to get their hands on.

It turns out US law enforcement has been investigating the site, including undercover purchases of heroin, cocaine and other drugs from vendors, since Nov. 2011. In July of this year, US border agents intercepted a package destined for an address in San Francisco that contained 9 counterfeit identity documents. The picture in each document was of Ulbricht, the indictment says, and the address led them to his place of residence.

Ulbricht has been charged with soliciting murder-for-hire, drug trafficking, money laundering, and computer hacking.

According to the indictment, he tried to have an anonymous user of the site going by the name "FriendlyChemist" killed after the user tried to extort $500,000 from him in exchange for not releasing a list of the site's customers identities. The "Chemist" entity said it owed money to a drug supplier, and Ulbricht as "DPR" (Dread Pirate Robert) asked to talk to the supplier.

A Silk Road customer named "redandwhite" contacted Ulbricht, and identified as the supplier. "FriendlyChemist aside, we should talk about how we can do business. Obviously you have access to illicit substances in quantity and are having issues with bad distributors. If you don't already sell here on Silk Road, I'd like you to consider becoming a vendor," DPR wrote on March 25.

On March 26, DPR contacted redandwhite again. "In my eyes, FriendlyChemist is a liability and I wouldn't mind if he was executed." DPR, according to the indictment, then provided the real name and town of residence of FriendlyChemist. A few days later, FriendlyChemist turned up the heat on DPR again, threatening to release the names of 2 dozen Silk Road vendors and about 5,000 account holders if he didn't receive $500,000 fast. A few hours later DPR again contacted "redandwhite," asking how much it would cost to "put a bounty" on FriendlyChemist's head. On March 30, redandwhite responded $150,000 to 300,000 depending on whether the murder was "clean" or "non-clean."

To this DPR complained, writing (according to the FBI) that "the price seems high. Not long ago, I had a clean job done for $80k."

Is DPR Ulbricht? The FBI insists it was his account. And in the process of Ulbricht soliciting the murder of "FriendlyChemist" (who could well have been an FBI plant, as could have "redandwhite"), this line attributed to Ulbricht stands out. This "kind of behavior is unforgivable to me," DPR wrote on March 30. "Especially here on Silk Road, anonymity is sacrosanct."

Yes. Instead of the libertarian paradise that Ulbricht said he was seeking to build, one free of the "violence and coercion" of government, Ulbricht appears to have set himself up as judge and executioner of a man for violating his criminal operation's law that "anonymity is sacrosanct." This extreme pose, if not the extreme step, is fairly common in internet circles. Government coercion is "bad" - but freedom to do whatever the heck one wants, even if that tramples on the freedoms of others, is good. And anonymizing networks like Tor (which was required to access the Silk Road website) will keep you free, no matter what.

That fantasy came crashing down for Ulbricht because while Tor might hide your internet protocol address and location, it can't do much to prevent good old fashioned investigative tools - or the fact that we all live in the real world, not the virtual one. A second indictment of Ulbricht for soliciting murder and torture lays out how compromised he's been, and for how long. It turns out the "clean hit" he thought he'd paid $80,000 for was arranged via the FBI.

In December of last year an undercover FBI agent posing as a cocaine dealer developed a relationship with Ulbricht, who eventually arranged a drug purchase through the agent. After the drugs were delivered to an employee of Ulbricht's, the feds arrested the employee.

An angry and concerned Ulbricht then contacted the FBI undercover in January of this year, and asked if he could arrange to have the arrested employee tortured as a way to force him to return bitcoin that Ulbricht alleged the employee had stolen from Silk Road customers. After thinking on it a day, he contacted the undercover again: "Can you change the order to execute rather than torture," Ulbricht asked, according to the indictment. 

The agent agreed, and after receiving a $40,000 down payment on an $80,000 murder contract (Ulbricht wired the money to an FBI controlled Capital One bank account in Washington DC), provided Ulbricht with a series of faked torture pictures, and ultimately a faked picture of the employee he said proved he was dead, as evidence he'd held up his end of the bargain. Upon being told his employee was dead, Ulbricht wrote: "I'm pissed I had to kill him... I just wish more people had some integrity."

Many people are obsessed with anonymity and privacy online, and many for good reasons. Edward Snowden, the NSA leaker who appears to have strong libertarian leanings of his own, says his concern about government prying into private citizens' lives is what drove him to betray the US government's secrets. Ulbricht's comments to Forbes indicate he sees himself as similarly motivated.

But in the end, utopian dreamers of the day often find themselves presiding over fresh horrors. Ulbricht, as Dread Pirate Roberts, told Forbes: "Sector by sector the state is being cut out of the equation and power is being returned to the individual. I don’t think anyone can comprehend the magnitude of the revolution we are in. I think it will be looked back on as an epoch in the evolution of mankind."

If the FBI's case against Ulbricht stands up, we've had a glimpse of where his revolution was heading and we're probably lucky that his "Silk Road movement" (as he described it to Forbes) has foundered.

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