Silk Road

Named after the historical network of trade routes that connected Europe and Asia, the Silk Road was an online black market founded in February 2011 by the pseudonymous “Dread Pirate Roberts” (later revealed to be Ross Ulbricht).

This platform, best known for selling illegal drugs, operated out of the dark web as a Tor hidden service that would enable the users to browse it anonymously and securely. Transactions on the site were carried out with bitcoin for anonymity.

CoinDesk - Unknown — Evidence entered into the record of Ross Ulbricht's federal trial in the U.S. Southern District Court of New York, depicting a flowchart of Silk Road's payment system, as envisioned by the U.S. Government.

Before it was shut down in 2013, the Silk Road handled over $1.2 billion worth of illegal goods and services, with over $79.2 million in commissions, according to the criminal complaint against Ulbricht. Following the closure of the site, the FBI seized 144,000 BTC (worth around $28.5 million at the time) which it said belonged to Ulbricht. The US Marshals Service later sold off the bitcoin in four separate auctions.

Following Ulbricht’s arrest and the subsequent closing of the Silk Road, a second iteration of the website - Silk Road 2.0 - was opened by the administrators of the original site. The successor only survived for a year, ending with the arrest of the alleged operator in 2014.

In 2015, Ulbricht was convicted of four narcotics charges and three charges related to money laundering, computer hacking and trafficking fraudulent identity documents. At the age of 31, he was sentenced to life in prison without the possibility of parole and is serving at the United States Penitentiary in Tucson, Arizona.

Additional Resources

Silk Road Wikipedia page

Silk Road Investopedia page

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