Federal law enforcement officials announced Thursday the arrest of Blake Benthall, who allegedly owned and operated Silk Road 2.0, a hidden website enabling users to trade drugs and other illegal goods.
Benthall, 26, was arrested Wednesday in his hometown San Francisco after a joint investigation by the Federal Bureau of Investigation and Department of Homeland Security.
"Blake Benthall's arrest ends his status as the alleged administrator of a website that allows illicit black-market activities to evolve and expand, and provides a safe haven for illegal vices," said Peder Edge, executive associate director of Homeland Security Investigations (HSI).
The Department of Justice alleged in a news release that Benthall, using the screen name "Defcon", secretly operated the underground site since December 2013.
The site was launched in November 2013 after the government shut down the original Silk Road website one month earlier and arrested that site's alleged owner and operator, Ross William Ulbricht, aka "Dread Pirate Roberts."
Officials allege Benthall assumed control over the site in late December, overseeing its computer infrastructure and programming code, its terms of service, its "massive profits" and the small staff who assisted in its day-to-day operation.
Both websites operate on the "Tor" network, which relies on a series of computers distributed around the world in order to conceal IP addresses and users' identities.
Like its predecessor, investigators described Silk Road 2.0 as a "black market bazaar", alleging that thousands of drug dealers have traded hundreds of kilograms of narcotics and other illegal goods through the site, as well as using it to launder millions of dollars.
Officials allege that as of September this year Silk Road 2.0 was generating sales of at least $8 million each month with approximately 150,000 users.
According to the Department of Justice media release:
As of October 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, 1,783 listings for "Psychedelics," 1,697 listings for "Ecstasy," 1,707 listings for "Cannabis," and 379 listings for "Opioids." Besides illegal narcotics, other illicit goods and services were openly advertised for sale on Silk Road 2.0 as well, including frauduent identification documents and computer-hacking tools and services.
As part of the investigation, an undercover HSI agent was allegedly able to infiltrate the site's support staff, and was given access to restricted areas of the site to interact directly with Benthall.
According to the official complaint, Benthall was able to purchase a luxury Tesla Model S worth approximately $127,000 in January 2014 using a downpayment of $70,000 in the digital currency bitcoin.
Social media accounts that appear to belong to Benthall, describing him as a "bitcoin dreamer" and "web entrepreneur", state that he used to work as a software engineer at SpaceX, a space transport services company. In an email to BuzzFeed News, a representative of the company confirmed it employed a Blake Benthall from December 9, 2013, to February 21, 2014.
Benthall has been charged with conspiring to commit narcotics trafficking, conspiring to commit computer hacking, conspiring to traffic in fraudulent identification documents, and money laundering conspiracy. For the one count of narcotics trafficking, he faces a minimum 10 years in prison, prosecutors said.
"Benthall should have known that those who hide behind the keyboard will ultimately be found," said FBI Assistant Director-in-Charge George Venizelos.
Manhattan U.S. Attorney Preet Bharara said Benthall's arrest should serve as a warning to anyone who may try to launch a third iteration of the site.
"Let's be clear – this Silk Road, in whatever form, is the road to prison," Bharara said. "Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don't get tired."