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The Epic Hunt for the Criminal Mastermind Behind the Silk Road
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Nick Bilton's new book, American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road, traces the rise and fall of Ross Ulbricht, a.k.a. Dread Pirate Roberts. At its peak, the site he founded, a so-called 'Amazon of drugs,' was doing tens of millions of dollars a month in business. Ulbricht was captured in 2013, after a two-year-long search that would come to involve half a dozen federal law-enforcement agencies. He is now serving two life terms without parole. I spoke with Bilton last week about Ulbricht, Silk Road, and first-mover advantage when it comes to darknet marketplaces.
How did you first hear about the Silk Road and decide to write a book on it?
I heard about the Silk Road the way that everyone else had - from Adrian Chen's Gawker article in 2011. I was writing for the New York Times at the time, covering hacker culture, and I read a little about Silk Road-related stuff and the dark web and so on. A couple years later, I was living in San Francisco, and I used to walk my dog past a tiny library near my house in Glen Park. Then I heard one day that the guy who ran the Silk Road, the Dread Pirate Roberts, had been arrested at that library. And that sort of led down the path to writing more about the story, and eventually writing this book.
How much of the Silk Road's success was attributable to Ulbricht's coding or product or managerial skills, and how much to sheer guts and first-mover advantage?
I think Ross's coding skills were not that great and had nothing to do with the success of the site; in the same way that Jack Dorsey and his cohort built a rough prototype of Twitter, which was done really poorly and continued to crash, and that had nothing to do with the success of that site. In all of these instances, it was first-mover advantage. Ross had this brazen idea - he didn't think it would become what it became - and he built it as a number of technologies kind of collided to allow it to come about.
At a point in the book, the FBI find a Silk Road server registered in Iceland - how does one go about procuring the necessary infrastructure components for a drug website?
Ross met a guy online by the name of Arto, in 2009, in a forum, and they started talking about all the technologies that he would need to build this thing. And Arto sent him off on a certain path. He started going on forums for Tor and Stack Overflow; he was just asking, 'How do I do this? How do I do that?' He was Googling his way into building a drug website where you could buy and sell anything imaginable.
Ross's various ex-girlfriends and ex-hookups make appearances in the book - what was their illustrative purpose?
You have a guy that was running the biggest black-market website ever seen, and he was making decisions about whether they were going to sell guns or body parts, or whether he was going to commission a 'hit' on someone. At the same time, he was going on dates with girls that he met on OKCupid. He was going camping. He was doing all these normal things. If I had been making these decisions, I would have probably been taking Xanax and drinking myself into a stupor every night to try to get through it. The story of Ross and the story of Dread Pirate Roberts and how they eventually morphed into one person is, for me, probably the most fascinating part of the whole thing.
Right, despite the fact that he was running a massive online drug empire, it did not appear that his own drug intake increased.
It actually decreased; he was telling friends that he had stopped smoking weed because he had a project that he was working on, and it made him feel groggy. And I think there's a point in the book when Ross and Variety Jones were having a debate about heroin, and Variety Jones thought it was terrible and shouldn't be sold anywhere, and Ross says, 'I agree; I would never use this, but I would also never tell someone that they can't.' For him, it was less about the drugs and more about the principle behind it. He genuinely believed that the government should not be able to tell someone what they can and can't put in their own bodies.
When the various law-enforcement agencies eventually found Ross, were they surprised by who he turned out to be? When they initially found out about the Silk Road, what kind of operation did they think they were dealing with?
They were all over the place. They thought at first that it was Russian hackers or Chinese hackers. Then, as they started to investigate, they were looking everywhere. They found a guy who worked at Google who knew a lot about bitcoin. They thought there was a guy in the Bronx, a Mexican cartel - there were all these different ideas. And when they finally figured out that it was Ross, it was almost too difficult to believe at first, because when they looked him up on Facebook, his profile picture was a photo of him hugging his mom.
What were Ross's biggest mistakes? Could he actually have gotten away with it?
Gary Alford, the IRS agent, came to the case very late, when a lot of law enforcement across the country, and state police across the country, were searching for Ross. He was the one who said, 'If Ross continues to do this, eventually he is going to make a mistake.' And that's the gambler's ruin - if you continue to play poker with the house, you're eventually going to lose. And it's really fascinating because a lot of people think that Ross ended up in jail today with two life sentences because he ran the site, and because of things he did when he ran it - but my feeling is that he ended up there more because of hubris. He could have walked away a month before, two months before, and he would have gotten away. And when he was finally arrested, he was offered a plea deal, which he didn't take because he thought he could beat it - he would have maybe gotten 10 to 30 years in prison, but he ended up getting two life sentences.
Was there any point at which he was really considering walking away?
Yeah, definitely. There's a point in the chat logs when he's talking with Variety Jones, about a year into the site's operation. After Adrian Chen had written that piece, knowledge about the site exploded. Senator Schumer was after him - the DOJ, DEA, HSI in Chicago. It was very much a defining moment. Ross talked about it with Variety Jones, that there was a part of him that was terrified and was ready to give up. But eventually, he decided, basically, If I haven't been caught yet, then I'm never going to get caught. That was his philosophy.
Various groups of law enforcement were pursuing Ross. What do you think was driving them, other than that they obviously all wanted to catch the biggest fish?
For each of them, it was something different. For Chris Tarbell, he had taken on some huge cases; he loved the challenge of finding the big bad guy. Jared Der-Yeghiayan had struggled his entire career to get into law enforcement; and for him, it wasn't just about the drugs, it was that if this site existed, then terrorists could use bitcoin, go onto the site and buy weapons, guns, and pull off another terrorist attack without ever having to smuggle anything into the country. Gary Alford also had a lot to prove, also very ambitious.
Did you get the same account of how the identification and capture came about from the various competing groups of law enforcement?
As in Silicon Valley, where every start-up has the guy who ends up running it, and then the two dozen people written out of the story, everyone had their viewpoint on what they had done to aid the capture of Dread Pirate Roberts. But at the end of the day, I would never have known that any one person was more influential than the others. I wrote all of their stories, and when you look at it, you realize that they all did have an influence. You had Gary Alford who first discovered Ross Ulbricht's name on that Google search; you have Jared Der-Yeghiayan who found the first pink pill and ended up working for the Dread Pirate Roberts undercover; Chris Tarbell who found the server; FBI - if you took any one of these out, you probably may not have caught him, and if you did, you may not have caught him with the evidence needed to convict him.
Do you have any idea whether the murders Ross commissioned actually happened?
Well, one of them was done by Carl Force of the DEA; that was a fake murder. After Ross was arrested, the FBI found out that the other murders were supposed to have taken place in Canada. They called the Mounties out there and started to investigate, but they never found any bodies. I asked one of the investigators, 'Did any murders happen?' And they said, 'I would never say it's 100 percent chance they didn't; I would say it's 90 percent chance they didn't.'
You weren't able to speak to Ross for this book. If you could have interviewed him, what would you have wanted to ask him?
I don't think I would have wanted to speak with him, unless he really wanted to speak to me. I don't think he would have told me the truth; even in the defense, his story actually changed a little bit from before he went to trial to when he was there. But if I could speak to him and know that his answers were going to be truthful, I would want to know whether he felt remorse for what he did. Because there were people's lives who were affected. There were people's lives who were lost. One law-enforcement officer showed me these graphs, which pointed to the rise of the opioid epidemic at least partially being because of websites and the dark web, where kids could buy fentanyl, something that's 100 times stronger than heroin, from these Chinese labs.
Do you think Ross's sentencing to two life terms was just, or overly harsh?
I get asked this question a lot, and I truly don't know the answer. Let's just say, hypothetically, that people actually had been killed, is the sentencing just then? Or just because someone wasn't killed, does that mean that he shouldn't suffer the consequences of the actions he did take? The prosecution presented this case that six people had overdosed, and they brought some of the families in - one of them who had the teenage kid in Perth who died - and you read that transcript or hear the parents talk, and it's brutal. When you think about that, and there were hundreds of people who were arrested in connection with the Silk Road - when you think about all these lives ruined, then maybe it was just. But then the other argument is that he was just a kid who was naive. One of the things the judge said, which I find really fascinating, especially when you think about drug laws in America and the number of African-Americans and Hispanics who are in jail today, was that the arguments Ross made in his defense - about how increased drug distribution could be morally better for society by reducing violence - were privileged arguments. Had anyone come in from the Bronx, they wouldn't have been able to make that argument.
TWO YEARS AGO this week, Ross Ulbricht was sentenced to life in prison without parole for running the Silk Road, an unprecedented dark web bazaar for drugs and other contraband. The judge intended the sentence to serve as a warning to other would-be internet narcotraffickers. But new research suggests more clearly than ever before that the strategy of making an example of Ulbricht didn't deter Silk Road users. In fact, it may have had the opposite effect.
In a study published in a forthcoming issue of the British Journal of Criminology, Boston College sociologist Isak Ladegaard provides some of the strongest quantitative evidence yet that the dark web drug trade actually received a sales bump following the news of Ulbricht's surprisingly harsh sentence. Starting in late 2014, Ladegaard used a software tool he built to trawl what was then the largest Silk Road-style dark web market daily for sales data. He focused on a 10-month window that included the time directly before and after Ulbricht's sentencing, and found that following Ulbricht's sentencing, the site experienced a significant increase in revenue.
'The timing suggests that people weren't discouraged from buying and selling drugs,' says Ladegaard. 'The data suggests that trade increased. And one likely explanation is that all the media coverage only made people more aware of the existence of the Silk Road and similar markets.'
That finding could draw scrutiny to the deterrence value of harsh sentences in little-understood computer crimes, particularly those where the risk of getting caught remains uncertain and where publicity can inspire copycat criminals.
The dark web has only grown in the years since the FBI seized the Silk Road's servers and arrested its creator in late 2013. At that time, the site had roughly 12,000 listings, for items ranging from marijuana to ecstasy to heroin to counterfeit documents. The largest dark web market today, Alphabay, has well over 300,000 listings, including more than 240,000 for drugs alone. It also offers other wares - like weapons and stolen data - that the Silk Road didn't.
But Ladegaard’s study shows more granular evidence that the dark web experienced a boost in sales in the immediate wake of Ulbricht's punishment. Starting in November of 2014, Ladegaard used a Python script to pull sales listings and customer feedback information from Agora, then the largest dark web drug market. Since Agora transactions required user feedback, Ladegaard could combine public feedback on any given item with the item's listing and price to gauge total sales on the site over time.
The resulting data showed that Agora's illicit business didn't just weather Ulbricht's life sentence. For vendors shipping their products from the US, sales more than doubled in the following days, rocketing from less than $40,000 a day to more than $100,000 daily in just two weeks. International sales increased even more dramatically, from $100,000 to $250,000 daily.
That's a direct contradiction to the 'deterrence' value that the judge in Ulbricht's case used to justify his sentence. 'For those considering stepping into your shoes, carrying some ... misguided flag ... they need to understand very clearly and without equivocation that if you break the law this way there will be very, very severe consequences,' Judge Katherine Forrest said in her courtroom sentencing statement.
Ladegaard concedes that he can't definitively explain those results. But he writes that sales bumps more generally followed media coverage of the dark web—and Ulbricht's life sentence was major news. (WIRED's story on the sentencing alone was read more than half a million times.) Over his 10 months of data, Ladegaard also collected 310 articles about the Silk Road and dark web drug sites, and found that weeks with more of that news - even about law enforcement action against the sites - correlated with more sales.
The study is careful to note, however, that the severity of Ulbricht's life sentence may have prevented an even bigger bump. 'It is possible that media coverage of the trial attracted new customers and vendors, who otherwise would not have known that cryptomarkets existed,' Ladegaard writes, 'but that the number of new registrants would have been much larger if Silk Road's founder had been acquitted.'
Ladegaard went further in his analysis of dark web users' mindsets, though. He collected sentiments from the user forums of Agora and a separate site known as The Hub, designed to serve as a community forum across dark web markets. The conversations he observed in the wake of Ulbricht's sentencing suggested that buyers and sellers blamed Ulbricht himself for his arrest, not the power of law enforcement's investigative techniques. Rather than see Ulbricht's downfall as inevitable, the anonymous commenters distanced themselves, calling him 'a scared shitless kid who .... was way out of his depth,' 'careless,' 'in over his head,' and 'arrogant.'
In other words, Ladegaard argues, the deterrence value of harsh sentencing for computer crimes like selling dark web drugs may differ from other crimes, given that criminals have wildly varying notions of the risk involved. 'The objective risk of getting caught isn't so important - it's the subjective perception of the risk,' says Ladegaard. 'You might feel safe because you're doing stuff on your computer in the comfort of your living room chair, or you could be more paranoid because you don't know what law enforcement is doing to track you down.'
In the case of Ulbricht's sentencing, at least, the more common reaction appears to be curiosity, and a sense of impunity, undiminished by Ulbricht's fate. The Silk Road's founder may languish in a New York prison, but his business model continues to thrive.
NICK BILTON'S AMERICAN Kingpin is the story of the hunt for Ross Ulbricht, the man behind the website Silk Road. Its flaws resemble those of Bilton's previous book, the 2013 bestseller Hatching Twitter (Portfolio/Penguin), which largely ignored the social media platform's meaning to its users or the world at large, instead dishing on the founders' squabbles over control, credit, and money. Similarly, while the ostensible topic of American Kingpin is an amazing combination of technologies that produced something new under the sun - a way to buy drugs that tended to be safe from the law as well as from rip-offs and overdoses - Bilton doesn't seriously explore the technical or social side of Silk Road. Nor does he delve much into the legal and ethical issues surrounding the drug war. Instead he tells a lurid cops-and-crooks story.
The founder of Silk Road wanted to improve the world by creating an anonymous online space where people who enjoyed mind-altering substances could buy and sell them with no physical risk from each other, connected with a community rating system that added unprecedented - though never perfect - safety and quality control to the drug market.
Starting in 2010, as the prosecution tells it, Ross Ulbricht worked relentlessly for about three years scaling the site up and keeping it running nearly flawlessly. Throughout this time, he was harassed by hackers, extortionists, and rivals. He is alleged to have earned for that work at least 174,000 bitcoins, whose current value would be over $300 million. Ulbricht was arrested by the FBI in October 2013, and is now in New York's Metropolitan Correction Center under a life sentence with no chance of parole.
Bilton's 'narrative non-fiction' approach means no fact is directly sourced in the text (though it's generally easy enough to guess who told him what). The boringly relentless quest for novelistic detail that comes along with that approach both overburdens the reader and underserves anyone interested in understanding the website. Readers of this book won't find a good explanation of the system whereby Silk Road protected buyers and sellers by holding their money in a cleverly designed escrow system, for example, but they'll get plenty of paragraphs about how certain federal building plazas looked or what was on the radio as a cop drove around on a certain day. Bilton got an old girlfriend of Ulbricht's to spill hours' worth of stories, and he transcribes what feels like nearly every tidbit he gleaned from her, to little benefit to reader understanding of the story of the Silk Road and its meaning.
As you might expect from a book that relies heavily on police sources, the vast majority of the narrative pushes the reader toward the police perspective. We get long, paranoid interior monologues from two different law enforcement folk convinced that Silk Road presented a danger in some way equivalent to 9/11. Bilton never misses a chance to mention Silk Road gun sales, though guns were available on the site for only a brief time and were even then a tiny portion of its business (which was overwhelmingly, though the book doesn't explain this, pot, acid, and MDMA).
Bilton does mention the libertarian vision that inspired Ulbricht, even name-dropping Murray Rothbard and describing a bewildered cop searching a Barnes & Noble for books on the Mises Institute. But that cop, as Bilton expresses it, sees libertarianism and Austrian economics as nothing but 'justifications for doing things...without taking responsibility for how those actions might affect other people.' In Bilton's goodguys- and-bad-guys context, Ulbricht's ideas come across as the dorm-room delusions and lame excuses of a villain.
Meanwhile, so you don't miss the point about the evils of drugs, Bilton gives three pages to the death of 16-year-old Preston Bridges in Australia, who took a designer drug bought on Silk Road, flipped out, and leapt off a balcony to his death. (His pals who took it with him experienced no ill effects.)
There are many more stories of people whose lives have been disrupted for years or ruined entirely by being thrown in a cage for selling (almost always perfectly safe) mind-altering substances to willing customers. Such stories, though never centered around a sympathetic character with a name, are not completely ignored. They are casually mentioned in blank bureaucratese on the next to last page: 'several hundred people...were caught buying, selling, and working on the Silk Road and were subsequently arrested.' But we don't meet them, don't learn how upset their friends or parents are, aren’t asked to wonder what good in the world is lost because they are locked up.
Bilton's police-eye narrative dehumanizes everyone Silk Road helped, treating them as notches on the belt of stalwart men. Bilton also sloughs off the pains, rip-offs, and even possible overdoses the site's existence prevented. Yet a careful reader will note, though Bilton ignores its importance, that Ulbricht's dream of a violence-free paradise of drug dealing was working swimmingly. The worm in the apple arose not from Silk Road's denizens, who were mostly buying and selling peacefully and happily, but from interference by Bilton's heroes in law enforcement.
In an indictment from October 2013 that didn't go to trial, a grand jury in Maryland accused 'Dread Pirate Roberts - the pseudonym under which Silk Road's boss began operating in 2012 - of ordering and paying for a murder in February 2013. (The slaying never actually occurred.) The government further spread to the press stories of further murders Ulbricht allegedly paid for, which also apparently never occurred. Bilton is confident from his access to Dread Pirate Roberts' chat logs that those accusations are true.
But that first time Dread Pirate Roberts allegedly decided lethal violence was necessary was when he came to believe one of his employees had stolen from him. In fact, unbeknownst to either employer or employee, the thief was a law enforcement agent investigating Silk Road. Thus, the turning point act in the moral devolution of Ulbricht, as Bilton tells the tale, came not from his own Silk Road community, which gave him minor trouble that he usually dealt with via payoffs, but from the police. Bilton worries over Ulbricht's corruption into a (imaginary) killer, but he elides the problems created when government forces drug sales into a space where no legitimate method of punishment or recompense exists.
Bilton's police-eye narrative dehumanizes everyone Silk Road helped and ignores the pains, rip-offs, and even drug overdoses the website's existence probably prevented.
BILTON RUSHES THROUGH Ulbricht's trial. He does not mention that a since-failed appeals process was still ongoing when the book went to press; he does not discuss, even to debunk, the legal issues with the prosecution that Ulbricht's lawyers have brought up. He fails to address any of the Fourth Amendment issues raised by the case, such as what Ulbricht's team argues was an unconstitutionally broad search of the contents of their client's laptop. He doesn't mention that the story he repeats uncritically about how the FBI found the Silk Road server has been declared impossible by various computer experts, and that the government provided no verifiable corroboration for it and didn't put the agent in question on the stand for cross-examination.
Nor does he discuss some obvious alterations in the computer records from Ulbricht's stolen laptop - discovered by his lawyers post-trial - or the fact that someone was logging into Silk Road servers as 'Dread Pirate Roberts' after Ulbricht was behind bars. When discussing the second set of alleged murders-for-hire, he lets nearly 100 pages pass before he lets the reader know that the killings never happened.
And then there's the book's end, which robs the whole cat-and-mouse game of any real meaning.
The conclusion calls back to the book's opening, when a Homeland Security agent discovers an MDMA pill in some mail that a colleague blithely decided to open. (Bilton's authorial voice sees nothing problematic in police opening any mail they want from overseas, a sad legal reality key to many aspects of this story.) In the book's final anecdote, with Ulbricht in prison for life, that same agent encounters a package with 200 such pills.
All the detailed sleuthing to find Ulbricht, all the lives upended and community destroyed, were ultimately for naught. Drugs are still sold, drugs are still shipped, drugs are still consumed.
And they always will be. Silk Road's encryption-and-bitcoin model is today used to sell more illegal substances than ever were moved over Ulbricht's website, because the method he pioneered is unequivocally better, in every way, for sellers, users, and society at large. The pointless quest to arrest him did nothing to kill that innovation.
Yet the people who dedicated their time - and our money - to 'taking him down' are the heroes of this narrative. Bilton's book does what he thinks it does: It tells a harrowing and depressing story of a moral compass gone hideously askew, destroying lives. But that broken compass isn't Ross Ulbricht's.
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