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Silk Road 2.0 busted! At least two arrests as federal crackdown begins

End of the Road in sight?

Internet Security Threat Report 2014

If drugs traffickers thought the anonymous online black market calling itself Silk Road 2.0 would be any safer from law enforcement than the original, it looks like they had better think again.

According to reports by Forbes and TechCrunch, the FBI have made "multiple arrests" of people believed to be involved with Silk Road 2.0 in a crackdown spanning at least two countries.

Silk Road 2.0 forum moderators going by the handles "Inigo" and "Libertas" were reportedly arrested in Virginia and Wicklow, Ireland, respectively.

A woman identified as the girlfriend of Inigo reportedly said that police told her that they were making simultaneous arrests of the site's users "all around the world."

The FBI has since confirmed to Forbes that it had moved against the encrypted marketplace, but it did not disclose the names of any of the people cuffed, or how many arrests had been made in all.

US authorities shut down the original Silk Road in October following the arrest of San Francisco man Ross Ulbricht, who is now awaiting trial in New York on charges that he created the site and profited from it for nearly three years.

In the process, authorities seized several Bitcoin wallets that they claimed belonged to operators and users of the site – a haul of illicit funds worth around $30m.

It wasn't clear at the time how law enforcement managed to achieve this since Silk Road routes its network traffic through the Tor service, which is supposed to make it easy for users to cover their tracks and work anonymously.

But in a post to the user forums of Tor Market – a competing site to Silk Road 2.0 – a user who is believed to be Inigo suggested that authorities may have a far better view into the workings of the online marketplace than anyone previously suspected:

Guys I was arrested yesterday and out on bond now. But something is fucked! I know I'm risking more warning you guys and my attorney doesn't even want me on the internet but you guys need to know this. When I was in the interview they showed me all sorts of shit that they should not know or have access to ... Something is definitely wrong and they have the ability to see things on here only mods or admins should like transfers and a dispute I had.

Prosecutors are still sifting through information gleaned from the original Silk Road bust to bring further cases against alleged drug traffickers, including four accused methamphetamine dealers who were charged in Oregon this week.

But many former Silk Road users seem undeterred by the recent police attention. A group of them wasted no time in launching Silk Road 2.0 following Ulbricht's arrest, complete with a new site admin taking on Ulbricht's alleged former moniker of "the Dread Pirate Roberts," or "DPR" for short.

The identity of this new DPR is still unknown. But on Friday he issued a statement to Silk Road 2.0 users saying the site had not been compromised by the recent arrests, since neither of the forum moderators that were charged had access to sensitive material. He further said he would make another announcement to address users' concerns soon. ®

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