Connect to the wifi and check your wallet app. Today we are talking about the crooked connections to cryptocurrency.
In a new age of electronic economics, one brand has made a lot of noise- Bitcoin. As early as 2009, when it was created, people began to stockpile the stuff. It was the first decentralized digital currency, and it has inspired thousands to risk this uncharted financial frontier with hopes of discovering a quick way to score some real-world cash from encrypted accounts. Then, just last year the cryptocurrency trend exploded onto Wall Street and ever since people have been trying to take advantage of the hype before the well runs dry. Suddenly anyone with a little extra scratch has become a cyber stockbroker.
While some have tried to cash in just to see if they can hit the crypto-lotto, others have become Bitcoin millionaires. But some of those people were actually gathering those funds through illicit means, like fentanyl trafficking.
Bitcoin for Beginners
For many of us, the whole Bitcoin thing is still a bit confusing. If some of these explanations seem oversimplified for anyone currently obsessed with cryptography, “block time” or whatever a “Merkle tree” is… I’m sorry, I guess.
Bitcoin was originally designed as being a truly free-market currency. This means without any company, country or central bank controlling its value or supply. Bitcoin takes no physical form, but actually only exists as a virtual token. Transactions are recorded in an open public ledger known as a blockchain. This peer-to-peer network avoids many risks of having a central database. But, while the transactions are typically public, the Bitcoin ownership is not.
The digital tokens are stored in a digital wallet that is only identified by a series of numbers and letters. A lot of times people using the digital wallet remain anonymous because they don’t have to provide any personal information to set up their accounts.
Because of all the freedom of Bitcoin, along with its anonymity, it became extremely useful for those involved with the Dark Web. You can read plenty more on that subject, but essentially is it another layer of the internet criminals use for conducting illicit business. One site from the Dark Web would be the infamous Silk Road.
The Future of Fentanyl Financing
Authorities say that bitcoin has helped create a new generation of criminals who buy and sell drugs online. It has become much easier for drug dealers to cover their tracks with cryptocurrencies.
Which of course leads us to fentanyl trafficking. For a long time the majority of drugs sold on the Dark Web were:
However, the sale of fentanyl is rising rapidly. Considering most fentanyl is sold online from dealers overseas, it makes a lot of sense that traffickers would rely heavily on digital money. Greg Nevano, the Deputy Assistant Director of Homeland Security Investigations states,
“You can order illicit opioids right online and have them delivered right to the comfort of your living room.”
According to CDC data, nearly 20,000 people died after overdosing on fentanyl in 2016. This is a huge contributing factor to one of the worst drug epidemics in American history.
For example, undercover investigators working for a Senate committee led by Ohio Republican Rob Portman talk about an e-mail from a fentanyl dealer with an important message for potential buyers. The fentanyl trafficker states:
“We have switched to bitcoin payments only. Now you will enjoy a 10 percent less price tag on all products,”
The email also points out:
“Good part is that paying by bitcoin you can order as much as you like with no limit.”
Ohio is suffering from one of the highest rates of fentanyl overdose deaths in the country. This particular investigation was part of a yearlong inquiry into the international supply chain that funnels fentanyl from China to homes across America. Earlier this year, the committee released a report which tracked activity on six websites offering fentanyl. That report indicated:
In each of these cases, the sites list bitcoin as the preferred method of payment. Portman himself adds,
“Because it’s anonymous, it’s the currency of choice for these drug traffickers,”
Just last fall the Justice Department shut down another illicit online marketplace called AlphaBay. In this case, the Justice Department seized around 144,000 Bitcoins, which comes out to around $48 million.
Cracking Down on Cryptocurrency
Lawmakers in Washington have come to the conclusion that cracking down on cryptocurrency is essential in order to stop the flow of fentanyl coming into the United States. Thankfully, this is one thing that officials from both sides of the aisle agree must be addressed.
Republican Senator Chuck Grassley from Iowa and Democratic Senator Dianne Feinstein from California have presented a bipartisan bill that would create explicit requirements for digital currencies to comply with laws against money laundering. Attorney General Jeff Sessions launched a task force earlier this year to specifically target fentanyl sales online.
Can We Blame the Crypto?
Meanwhile, many advocates for cryptocurrencies are not happy about these new campaigns. Perianne Boring, president of the Chamber of Digital Commerce, is one person who fights on behalf of Bitcoin, stating:
“Blaming bitcoin for this crisis would make as much sense as blaming the internet or cars that drug traffickers have to use.”
Boring’s organization is trying to help. They are part of the Blockchain Alliance, working with more than two dozen companies to help authorities combat crime.
Industry groups also reject the claim that cryptocurrency is anonymous and untraceable. They say Bitcoin users are “pseudononymous” because buying Bitcoin does require real money. Advocates insist that most users convert real cash through exchangers that do actually collect personal information. They also argue that in order to spend that Bitcoin, users will have to convert it back to real money, and that’s where law enforcement can intercept illegal operators.
Crypto-advocates also point out that cryptocurrency exchangers in the United States are also subject to federal reporting requirements and laws against money laundering. Earlier this year an industry analysis by the Foundation for Defense of Democracies found:
- Less than 1 percent of bitcoin is used for illegal purposes.
- Almost all of the illicit activity came from transactions on the dark web
However, the report also goes into detail about ways criminals can avoid regulated currency exchangers altogether. This includes using foreign converters or “mixing” sites that allow users to swap Bitcoin.
Meanwhile, new cryptocurrencies that are even harder to trace are gaining in popularity. So it would seem that as soon as the system catches up to a new digital trend, someone creates a copy and the cycle starts all over.
So can Bitcoin and other cryptocurrencies expect to be subject to new attempts at strict regulation? If so, what kind of regulations should be put in place to track digital transactions and prevent further abuse for illicit profits?
The evolution of the internet has changed how illicit drug markets work. The fight against drug trafficking is more complex than ever before, and strategies for facing drug dealing, drug use, and addiction have to evolve, too. This also means providing innovative and cutting-edge treatment options. If you or someone you love is struggling with substance abuse or addiction, please call toll-free 1-800-951-6135. We want to help. You are not alone.
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Author: Justin Mckibben
It seems most of the nation has finally had their eyes opened to the reality of the situation, there is a very real heroin epidemic in America. This is a sometimes inconspicuous but still intense illness that affects all people, across gender, socioeconomic, age, and ethnic lines. And that’s becoming more and more apparent as a heroin and other opiates continue to take lives in homes across every cultural barrier.
But where did it come from? What caused it and who is to blame?
We could point the proverbial finger at the over-prescribing or crooked doctors, or we could point it at the patients.
We could blame the pharmaceutical tyrants or the faltering politicians that allowed them to run rampant for so long.
We could definitely find some fault in the war in Afghanistan and the policies from a War on Drugs that has failed miserably.
Indeed we should blame all these things.
There is an abundance of reasons we have a heroin/opiate epidemic in this country, and plenty of blame to go around, but let us just focus on one in particular today; the internet!
Easy Access Online
As much as we love them internets, we have to also give it its due responsibility for this plague on our people. The internet created a forum for easy access to prescription drugs without a doctor’s approval, and it can be so easy it is no wonder the epidemic didn’t get worse faster.
According to some reports, all one needs to do to fully understand the complexity of the internet’s black market selling pharmaceutical drugs illegally is to go to StreetRx.com.
This website actually gathers user-submitted information across the country on street prices of diverted prescription drugs, as well as illicit drugs.
Reviews of the site attest that users can anonymously view, post and rate submissions in a format offering price transparency to an otherwise cloudy underground marketplace.
The information provided on this site is actually quite detailed. Just a few examples of information one might find includes:
- $60 Reasonable OxyContin (hard to crush) 60 mg Hartford, CT
- $25 Cheap OxyContin (old OC-crushable) 20 mg Wiscasset, ME
- $3.75 Reasonable Methadone 10 mg Hartford, CT
- $15 Pricey Oxycodone 15 mg Burlington, VT
- $3 Overpriced Oxycodone 5 mg Providence, RI
- $10 Overpriced Dilaudid 2 mg Worcester MA
Evolution of the Dark Web
The Dark Web has seen some serious exposure lately after the arrest of infamous digital drug dealer Ross Ulbricht AKA “Dread Pirate Roberts” who had created the vast online drug den known as Silk Road before being tracked down and having the site dismantled.
Still, plenty of smartphone apps like Instagram have been manipulated for facilitating illegal transactions and making connections with dealers, and plenty of other drugs are bought online through sites just like Silk Road.
The luxury and simplicity by which one can unlawfully purchase mind altering drugs with just a simple click of the mouse has made a substantial contribution and propelled the heroin epidemic. As a result, prescription opiate painkillers are very easily obtained and once someone gets hooked on them for long enough many will switch to heroin, because these days the drug is only getting more pure and cheaper.
Considering this, you can forget what you thought you knew about how this drug has evolved and who the primary consumer it. A heroin addict looks nothing like what most used to assume. Now heroin is a white suburban disease, with women in their 20’s and 30’s among the most rapidly increasing group of heroin users.
Changing the Status
The internet, social media and online shopping have all done their part to turn this virtual world into a viscerally disturbing reality of drugs and disease. But not all the blame should be placed on the internet, and in many ways it has done some good. By utilizing blogs, chat forums, videos and social media there are various organizations and authorities who have taken to the internet to create efforts for raising awareness. Message boards and even hashtags (#) have been linked to these movements to share information and provide resources.
And of course, how could we talk about the internet as if it doesn’t provide us with this versatile platform to have this conversation?
Heroin overdose is killing in rapid numbers, and there is no spyware or control-alt-delete answer for it. But more than the internet is to blame, we have to stop looking around for places to point the finger and ask ourselves what we have done to contribute to a healthy and fruitful future for this country. Click, like and share that.
As a society using the internet for so much of our communication and information, it is no wonder that it has made drug dealing and addiction a more “convenient” and consistent trend. With it comes death in devastating numbers, but it doesn’t have to be. There is help for those who want it. If you or someone you love is struggling with substance abuse or addiction, please call toll-free 1-800-951-6135
Author: Justin Mckibben
Ross Ulbricht, AKA “Dead Pirate Roberts” (DPR) is a name I’ve written about several times before. He is the founder of the original Silk Road, and for those of you who have no idea what the means, it is the massively successful online drug marketplace referred to as the ‘Amazon.com of Drugs’ that was taken down a while back and has since been mimicked and replaced with other online markets, that have also been shut down and replaced in a seemingly endless cycle of greed measured in bitcoin and gigbytes.
This past Friday, May 29th 2015 the cycle may have ended permanently for Ulbricht, as he was in a New York courtroom claiming he was a changed man, looking for some semblance of redemption, or at least a little leeway, but this time there was no fire-wall or spy-ware to protect him. Not too many people are buying what the defense team for Ulbricht was trying to sell, as their newest attempt to lessen his prison time was on the grounds of “harm reduction.”
Ulbricht’s legal team asked the judge to consider Silk Road as a place that significantly reduced the danger of drug use to the user on the grounds that it created a format where several factors associated with the drug trade were replaced with a system which let customers have control over their deals in safety.
Ulbricht’s lawyer Joshua Dratel stated in the filing:
“..Transactions on the Silk Road web site were significantly safer than traditional illegal drug purchases, and included quality control and accountability features that made purchasers substantially safer than they were when purchasing drugs in a conventional manner.”
Dratel described Silk Road as if it was a unique application of harm reduction, which is typically associated with needle exchange programs and anti-overdose kits being distributed as a method of reducing the problems associated with drug use on the street.
It isn’t entirely untrue, but even the top 4 factors that could be considered to be relatable to harm reduction, when you take a closer look, could be considered a little contrived.
- Less Danger?
For anyone who has ever bought drugs, there is obviously some element of danger commonly associated with these transactions. Of course it depends of what you buy and where, from who. Buying heroin off the corner could easily get you robbed, even assaulted or injured. So you are reducing some harm by purchasing it via the web and having it shipped to your house.
On the flip side- just because it is a ‘safer’ drug deal because the environment is less likely to get you robbed or ripped off doesn’t mean it is harm reduction, right? It’s still a drug deal. Spreading it out over the servers doesn’t justify it. The judge shot this logic down, saying:
“Silk Road was about fulfilling demand….about creating demand.”
In other words there would be no harm to reduce without Silk Road creating the dark web drug den and supplying drugs.
Harm reduction is typically about giving people safer means by which to do the drugs they are already buying, not providing them easier access to the substance itself.
Then there is the fact that even though the last stop in the chain of transactions was a little safer, it doesn’t mean that the cartels trafficking drugs, the conditions where they are grown or made, or the enterprises being funded by drug money (such as ISIS or other terrorist groups) are any ‘safer’ in the process. There is still plenty of risk to go around.
- Quality Control?
Then there is the idea that Silk Road was harm reduction because it created its own level of quality control, introducing several components that seemed to make dealers accountable. The digital drug expo featured Ebay style ratings and review boards where crowd-sourced information about drugs and dealers allowed customers to feel safer from the danger of buying tampered with products.
Thus the community trusted the dealers being logged and recorded as quality business men.
But again, all this does is feed into the demand. It doesn’t really reduce anything but a drug users doubts that they will get what they want for the right Bitcoin (hacker money).
- Safety Tips?
This one actually makes some sense. Silk Road featured crowd-funded advice about drug use, including:
- How to ‘fix’ drugs properly (how to use certain drugs certain ways)
- What to expect on your first time using
- What to do in case of overdose
There is no doubt that this could be potentially lifesaving information for people committed to illegal drug use.
Some forums included medical advice from physicians themselves. Ulbricht even tried to keep Silk Road ‘safe’ by paying $500 a week to the infamous Dr. X, who was himself a self-identified drug user who regularly answered questions from users about the harms or merits of taking both legal and illegal drugs.
Dr. X’s real name is Dr. Fernando Caudevilla and he described this aspect as harm reduction.
Considering that this element of the site was designed to keep users safe by providing medical information and allowing for open communication about drug use, it can run parallel to the strategies other legitimate harm reduction campaigns use to keep users informed and medically supported.
And yet… not everyone felt it was effective enough. Emotional statements at the hearing came from the parents of drug users who had overdosed and died from drugs purchased from the Silk Road, many called for the longest sentence the law would allow.
The aims of Silk Road were initially governed by a strict code of ethics. Early visitors of the site lobbied DPR to allow complete freedom for any transaction, but Ulbricht was adamant about his principal… at least at first. He stated:
“Our basic rules are to treat others as you would wish to be treated and don’t do anything to hurt or scam someone else.”
This meant no sales of a more sinister nature, such as:
- Child pornography
- Stolen goods
- Fraudulent degrees or IDs
Though this was a firm founding ideal, it appears most of these items were for sale when the site was finally shut down.
At the end of the day Ulbricht was found guilty last month of 7 offenses he was charged with, including a “kingpin” charge that puts the 31-year-old hacker from Texas up there with mafia dons and drug cartel leaders.
Judge Katherine Forrest gave Ulbricht the most severe sentence possible, beyond what even the prosecution had explicitly requested. The minimum Ulbricht could have served was 20 years, but the judge sentenced him to life in prison… without the possibility of parole.
In addition to his prison sentence, Ulbricht was also ordered to pay restitution of more than $183 million, what the prosecution had estimated to be the total sales of illegal drugs and counterfeit IDs through the dark web hot spot. As the judge passed down the sentence she said:
“You are no better a person than any other drug dealer.”
Of course his defense team is already preparing for their appeal, and this is surely one story we will be hearing about for a while.
In my own opinion: The very idea that they are trying to call this harm reduction is just a little (or a lot) absurd. Creating a dark web market of drug dealers to push raw opium, various illicit plants and pills for massive amounts of money, while claiming to be beyond the laws of the nation, and even trying to pay tens of thousands for the murder of half a dozen people is not exactly the ideal model of harm reduction.
Real harm reduction can help a lot of people. Drug addiction is a perilous and powerful disease, but harm reduction is one way that thousands of people are trying to help those suffering, while treatment facilities develop innovative and life-saving recovery strategies. If you or someone you love is struggling with substance abuse or addiction, please call toll-free 1-800-951-6135
(This content is being used for illustrative purposes only; any person depicted in the content is a model)
Author: Justin Mckibben
Following the collapse of the infamous Silk Road Empire, the Internet was left with a few other Dark Web sites designed for illegal trade and illicit goods, and the top other drug marketplace that took dominance in the wake of Silk Road (the original, 2.0 and 3.0) being shut down has apparently vanished overnight in what seems to be a scam.
Unlike its predecessor, the site named Evolution does not appear to have been taken down by law enforcement. Some are suspecting foul play by site administrators, who many suspect have actually taken off with millions of dollars in drug money. What jerks to rob drug dealers and traffickers, right? The underground online entrepreneurs known as Kimble and Verto apparently are trying to avoid the fate of ‘Dread Pirate Roberts’, and skip town while there ahead.
The Silk Road Recap
Silk Road was the original “Amazon of drug dealing,” and was shut down in 2013 after an extensive investigation which brought the original hackers behind the scenes to justice for soliciting various levels of illegal activities.
Ross Ulbricht, AKA the original ‘Dread Pirate Roberts’ and the cyber mastermind behind the Silk Road’s online drugs marketplace, was officially found guilty on all charges after a trial lasting 3 weeks, which convicted him of various charges, including but not limited to:
- Drugs conspiracy
- Money laundering
After the fall of that empire a host of other sites gathered up in an attempt to take its place.
Silk Road 2.0 was shut down a year later, and many so-called “deep-web operators” were arrested as part of a global crackdown. Blake Benthall launched Silk Road 2.0, and was arrested in November of 2014, facing 10 years on charges including:
- Conspiring to commit narcotics trafficking
- Conspiring to commit computer hacking
- Conspiring to traffic in fraudulent identification documents
- Money laundering conspiracy
Since then, Evolution has become the top site for anonymous users to purchase drugs and other illicit substances, from hacking tutorials to weapons, using digital currency, bitcoin. Most of the active vendors abandoned Silk Road 2.0 after a huge hack that lost a lot of money for the site, and they moved their business in favor of other large markets, and Evolution was a top choice for providing better security.
Evolution was piling in the bitcoin in the absence of Silk Road, and vendors all seemed to trust the system. Then without a trace this past Tuesday night, the site disappeared, as if it had evaporated from the internet. Digital drug dealers across the world clicked and scrolled furiously looking for their accounts, but they had cleaned house.
But this whole exit strategy was apparently not completely without warning, as some users reported that the site had stopped withdrawals of bitcoin funds over the weekend, claiming “technical difficulties.”
Then that Tuesday night, an Evolution moderator posted a warning on Reddit that stated:
“[T]he admins are preparing to exit scam with all the funds. Not a single withdrawal has gone through in almost a week. I am so sorry, but Verto and Kimble have ****** us all.”
This particular regular of the site claimed to have lost $20,000 worth of bitcoin, and was trying to reach out to his fellow consumers to assure them that the end was near, and they had been had. Overall, it was estimated that more than $12 million in bitcoin may have gone missing in the scam.
Needless to say, the Evolution community members have responded with nothing less than indignation and a fury of threats. Makes sense seeing as how they were invested in an internet scandal that was set to make them a lot of money before they had the floor dropped out from under them. One even warned that the site’s administrators that he would allow them 24 hours to make right by the scam and re-open the market, and allow people access to their funds, or there would be consequences.
Sources say that the scam could wreak havoc not just on the direct customer of the Evolution site, but could spread out its impact on the deep-web community as a whole by causing the price of bitcoin to plummet. According to the stats of what could be considered a Dark Web Wall Street, the worth of bitcoin has already dropped down from $291 to $281 on Tuesday alone.
Some might call this ironic justice. All these drug dealers getting together online to swap substances and traffic illegal goods and services, and they’re surprised when the drug dealing cyber-criminal masterminds behind it decide to pull a huge online heist? It’s actually comical. So now the world holds its breath as the digital drug dealers migrate to another site, and threaten to track down the Evolution operators. You could hire a hit-man, just not on that site. And your bitcoin isn’t worth what it once was. I find it strangely difficult to feel bad from anyone involved.
Silk Road, Evolution and the Dark Web may have fallen on hard times, but the disease of addiction and drug abuse is still prominent, and still just as fatal. If you or someone you love is struggling with substance abuse or addiction, please call toll-free 1-800-951-6135
Author: Justin Mckibben
I have written a lot in the past about the controversy surrounding the infamous Silk Road and tracked the activities of Silk Road related arrests. The well-known Dark Web site has slowly but surely earned itself a reputation as a ‘name brand’ for black market online transactions, specifically for the sale and trafficking of illicit substances.
Since late 2013, there have been some key arrests made and some combative actions taken in attempts to dissolve the Silk Road, including:
- In November 2013, the Silk Roadmarketplace was seized by the FBI, and Ross William Ulbricht, also known as “Dread Pirate Roberts” was arrested on allegations of being the owner of the market.
- Silk Road 2.0started up just months after the end of its predecessor under the control of Ulbricht’s second in command, who took up the “Dread Pirate Roberts” mantel.
- Last December,federal agents arrested 3 of Silk Road 2.0′s administrators, and the second “Dread Pirate Roberts”, leaving Silk Road 2.0 in the care of his second in command, “Defcon”.
Most of the active vendors abandoned Silk Road 2.0 after a huge hack that lost a lot of money for the site, in favor of other large markets such as Evolution and Agora that provide better security. Now another major development in the Dark Web war on drugs has hopefully set the tone for the future of fighting online drug trafficking.
The Silk Road Story
At one point Silk Road was known as the “Amazon.com of drug dealing” and became such a pioneer in pushing poison via the digital underground by using secure technology and an advanced buyer/user feedback system.
- According to evidence presented at the trial, under his alias Ulbricht first hatched Silk Road back in 2009.
- The original Silk Road was launched in 2011
- The site became a massive international online marketplace, where members hawked everything from heroin and cocaine to drug paraphernalia and other illicit items, like computer hacking programs.
- Goods were sold anonymously and paid for with electronic currency bitcoins.
Prosecutors stated during the course of the trial that through charging a commission on all the transactions that took place through their forum with a percentage of the sale, the site was able to put together an estimated $18 million in net worth by the time of Ulbricht’s arrest.
The End of ‘Dread Pirate Roberts’
Ross Ulbricht, AKA the original ‘Dread Pirate Roberts’ and the cyber mastermind behind the Silk Road’s online drugs marketplace, was officially found guilty on all charges this week after a trial lasting 3 weeks. Ulbricht was convicted of various charges, including but not limited to:
- Drugs conspiracy
- Money laundering
Today Ross ‘Dread Pirate Roberts’ Ulbricht faces 20 years to life in prison for his involvement in the illicit internet empire that earned him a lot of bitcoin and a lot of attention.
Ross Ulbricht’s defense itself seemed a little weak. Ulbricht did admit in court that he had created Silk Road, but he then insisted that he had sold it and cut ties before being captured in 2013 by the FBI. His defense attorney claimed that the site was created as a harmless “economic experiment”, and that Ulbricht’s invention was later taken over by actual drug lords. Honestly it seems a little far-fetched, and apparently the jury wasn’t buying it either.
The verdict came down swift on Ulbricht, ultimately finding the ‘Dread Pirate’ of the cyber seas guilty on all of the charges brought against him.
Commenting on Ulbricht’s conviction, Manhattan US Attorney Preet Bharara said,
“should send a clear message” that “the supposed anonymity of the dark web is not a protective shield from arrest and prosecution.”
This is an important point to make, especially since the major selling point for the Silk Roads clientel was the illusion of immunity from arrest based on the idea that there was ‘secured internet anonymity’ on the site. After Silk Road was shut down, the digital drug game didn’t skip a beat, as the forum was taken down, it was soon replaced by Silk Road 2.0 whose alleged operator Blake Benthall was arrested last year and faces up to 10 years in prison.
Oh but the buck doesn’t stop there, because Silk Road 3.0 was quick to replace it, just not with nearly as much support. These online cartels seem to be not going down without a fight, but despite their resistance it seems all ‘Dread Pirates’ must go down with their ship.
While some people are doing everything in their power to spread the scope of the illicit drug trade, others simply want to keep it contained to protect those whose lives are devastated by drugs and alcohol. As the reach of the War on Drugs reaches into the Dark Web, those who suffer deserve a way out. If you or someone you love is struggling with substance abuse or addiction, please call toll-free 1-800-951-6135. We want to help. You are not alone.