The various investigations that undergo behind various kinds of hacks and scams in the Crypto domain are very crucial, as trust is the rarest commodity one can find in this era. Let’s understand the background connections between Mt Gox and Silk Road, through this detailed extract.
Silk Road was a darknet Marketplace initiated by Ross Ulbricht, in February 2007 which incorporates the functionalities of Tor Network and Bitcoins to provide a completely anonymous E-commerce website. Although it was not initiated with bad intentions, the Marketplace eventually was one of the leading Centre for the trading of illegal drugs, predominantly Cannabis. However, due to the illegal use of the Silk Road, one of the US Senate members, Chuck Schumer called upon to bring down Silk Road, as it was misusing Bitcoins.
The original inventor Ross Ulbricht, was not a core developer and therefore had fever technical knowledge. The Silk Road expanded by multiple folds which let him approach one of his friends named Richard Bates, who agreed to offer him help but later distanced himself from the project, citing the regulatory concerns. This indirectly led Ross Ulbricht, to take assistance from a complete stranger who he met through Silk Road itself. The Stranger cited a vulnerability in the website code, that could potentially be exploited to steal Bitcoins from the accounts and persisted Ross to give him access to them. Once Ross was utterly convinced he granted him all the access. Taking advantage of which, the stranger took over the entire website and formally declared it on the website, with the name “Dread Pirate Roberts (DPR).”
The illicit use of Silk Road was exposed when an investigator named, Jared Der-Yeghiayan found unusual drug packages at the Chicago Airport. He further went into investigation and found out that the parcels were a part of Silk Road. Through Bitcointalk.org he found out information about a website which specifies the users how to incorporate Tor, to use Silk Road. On further investigations, he found out that the domain name for silkroadmarket.org was registered with a company owned by Mark Karpeles. His further investigations led him to one of his lead Ashley Barr, one of Karpeles’s associates. All the investigations are done, where submitted to the Homeland security investigations on July 2012 by Der-Yeghiayan.
The investigation was further handed over to an agent named McFarland. He proved to be one of the significant obstacles in all the investigations done by Der-Yeghiayan. He tried to move Der-Yeghiayan away from the case as he would gain an opportunity to exploit the vulnerabilities of the Silk Road and various other members related to it, by blackmailing them and eventually extorting money out of them. Both of them were assigned to jointly work on the project, but McFarland tried to monopolize over the case for his interest. Baltimore’s Drug Enforcement agency was also involved with the project and had similar reports with that of Der-Yeghiayan’s which indirectly let him know that McFarland had leaked his investigation reports to everyone.
It was later found out that the complete information had been leaked to two of the agents named Carl Mark Force and Shaun Bridges. Eventually, bridges went rogue and had almost seized $2 million worth Bitcoins from the account of Mark Kerpeles. Later, both of them undertook a secret mission, where they captured Curtis Green, ae and inquired one of middleman for DPR, by undertaking a deal with a leading cocaine vendor on Silk Road, “googleyed”. They acquired the knowledge of taking over multiple accounts on Silk Road, from Green. The allegedly stole 21000 Bitcoins indirectly. They first transferred the Bitcoins, through the newly acquired knowledge to the Green’s account and indirectly from Green’s account to theirs.
By incorporating the new knowledge two of the agents jointly, scammed and blackmailed many vendors on Silk Road to extort money from them. This was the dark reality of the agents which who misused their power within the judicial system. Stay tuned for the Episode 2 on Coinnounce.