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Policing the Silk Road: Is Law Enforcement Ready?

By: , Posted on: October 3, 2013

Silk road IconLately I have been thinking about computer generated digital currency, specifically Bitcoin. I don’t know why. I know I didn’t miss a special Camacho cigar sale only available through purchasing with Bitcoin. It may have all started when I read Sukum’s USA Today article on a Senate committee’s investigation into establishing regulations on virtual online currencies. I then read with great interest Greenberg’s article on purchasing marijuana on the Silk Road with Bitcoin. And then on October 2nd, the alleged mastermind of Silk Road was arrested by the FBI. For those unfamiliar with the Silk Road it was a website:

… “hosted on the anonymous Tor Network through hidden protocols that create a byzantine connection to scramble the identities of those trying to access it. Once there, people who buy and sell on Silk Road don’t know who they’re buying from or selling to, which is the point. Hence, while legit products are bought and sold on Silk Road, so are drugs and other illegal contraband. And they’re all paid for in Bitcoins.” (Hutchins, 2013)

My interest in Silk Road was purely academic. I only smoke cigars after all. Greenberg followed up his purchasing article with one discussing an initial tracing method for the Bitcoin transactions. The tracing method was interesting but more would be needed to identify arrest and even prosecute someone for illegal activity on Tor.  Greenburg’s article was not the reason for the recent FBI arrest, which stemmed from a two year investigation. Details coming out about the arrest of Silk Road’s leader, “Dread Pirate Roberts” (DPR), reflect he got sloppy with his methods and got caught.

DPR’s arrest is not the first Silk Road arrest. Early this year an  Australian drug dealer become the first person to be convicted of a Silk Road-related drug crime. There have been other arrests concerning illicit activities on Tor which are quite disturbing. Silk Road was not the only illicit black market on Tor, nor will it be the last. There are numerous others out there.

Many in law enforcement circles are sounding the alarm about Tor and Bitcoin.  Together they provide something that illicit markets thrive on, the ability to make seemingly anonymous illegal transactions.  Tor makes tracing the originating ISP addresses impossible. Bitcoins also currently aren’t regulated.  Combined they create a perfect storm for cybercrime.

Investigating Internet Crimes

The other advantage to dealing on sites like Silk Road is both the seller and buyer don’t have to worry about getting arrested or robbed on the scene. (Obviously, recent events indicated they may get arrested later though)  The transactions can be done, “anonymously” from the safety of one’s own home.  Now it is clear someone could still be ripped-off during transactions. Either the drugs aren’t delivered or payment is not made. However, many of these anonymous sites provide a rating system, allowing buyers to rate sellers, to quality and delivery. You don’t have that kind of open rating system in street sales.

The advent of Bitcoin, Tor, and sites like Silk Road, may create an outbreak of “mom and pop” or part-time drug dealers, particularly with drugs like marijuana which can be grown by anyone. Other drugs such as meth, can be produced by anyone, with a bit of knowledge or Internet research. Yes, I know the growth and/or production of these drugs doesn’t come without risk of discovery. But removing the supplier also negates one more area for the law enforcement to detect the illegal operation. It is now a two party transaction, instead of three or more.

The Internet and more specifically Tor and Bitcoin are making it easier for anyone to be a drug dealer, even in their spare time.  Other, more insidious illegal activities are also unfortunately growing on Tor. The question for law enforcement is, are they prepared to investigate this new avenue of illegal activity? This week’s recent events would indicate that in the US at least the feds are working these cases. But the feds can’t work all these cases alone, particularly if they keep being furloughed.  All of law enforcement has got to develop and learn techniques to investigate illegal activities on anonymous networks/websites. The alternative is to let the criminals take over online and in our streets.

Investigating Internet Crimes, 1st Edition: An Introduction to Solving Crimes in Cyberspace is now available for pre-0rder on the Elsevier Store. Use discount code “STBCNF13” at checkout and save 30% on this timely book!

About the Author:

art bowker biopicArt Bowker (@Computerpo) has over 27 years’ experience in law enforcement/corrections and is recognized as an expert in managing cyber-risk in offender populations. In addition to co-writing Investigating Internet Crimes, 1st Edition: An Introduction to Solving Crimes in Cyberspace, he is also the author of The Cybercrime Handbook for Community Corrections: Managing Offender Risk in the 21st Century.

Art is a lifetime member of the High Technology Crime Investigation Association (HTCIA) having served on its Executive Committee, including as President in 2008. In 2013, he received the American Probation and Parole Association (APPA) Sam Houston State University Award for his writing contributions to promote awareness of cybercrime and tools for helping the community corrections field combat computer crime. Additionally, Art was recognized as the 2013 Great Lakes Region, Thomas E. Gahl Line Officer of the Year by the Federal Probation and Pretrial Officer Association for his work in the cybercrime area. You can learn more about Art, his work and interest at his website, Computerpo.com.

References

Sukum, K. (2013, August 26). Government Eyes Regulation of ‘Bitcoins’. USA TODAY: Latest World and US News  – USATODAY.com. Retrieved September 17, 2013.

FBI — Oversight of the Federal Bureau of Investigation.  (n.d.).  FBI — Homepage.

Greenberg, A. (2013, August 14). Here’s What It’s Like To Buy Drugs On Three Anonymous Online Black Markets – Forbes. Information for the World’s Business Leaders – Forbes.com.

Greenberg, A. (2013, September 5). Follow The Bitcoins: How We Got Busted Buying Drugs On Silk Road’s Black Market – Forbes. Information for the World’s Business Leaders – Forbes.com.

Hutchins, C. (2013, September 4). A Fistful of BitcoinsCharleston City Paper.

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