As online black markets evolve, authorities find it harder to plug the dam.

As online black markets evolve, authorities find it harder to plug the dam.

At 3:15pm on October 2, 2013, the world’s largest online black market, with more than $15 million in annual sales and 13,000 listed products (70 percent of which were drugs), came tumbling down as federal agents raided a San Francisco public library, arrested 29-year-old Ross Ulbricht and seized his website. Working as part of operation “Onymous,” FBI agents predicted that this bust would be the beginning of the end for online black-market bazaars. They couldn’t have been more wrong. Instead, the shuttering of Silk Road triggered a proliferation of recalcitrant digital markets with increased anonymity and, above all, an ever-growing selection of illegal products available to any inquiring shopper. Authorities should have known better. 

The first online drug transaction occurred in the early 1970s when a group of wearied students opted to stop solving quantum physics problems and instead focus on the problem of not having marijuana. The MIT and Stanford geniuses eventually completed what would become the first e-commerce transaction for a small bag of marijuana. And just like stems and seeds, the FBI was annoyingly included with that purchase. Since it was the 1970s and Moore’s law had yet to become a ubiquitous buzzword for tech bloggers, authorities could easily track IP addresses, which made it stupidly easy to identify buyers and sellers. This business inconvenience continued for decades until 2011 when Ross Ulbricht founded Silk Road as a method to invoke his staunch libertarian theories and promote “victimless crimes,” thus turning the Internet into a free-flowing buffet of party favors adeptly ranked, priced and packaged for the discerning tech shopper. Ulbricht achieved this digital — and spiritual — liberation by creating an e-black-market, unreachable by the standards of your mom’s browser and accessible only by special anonymizing software called Tor. With that, crypto-markets (as Silk Road and the sites that followed would come to be known) only needed a currency for users that was as unidentifiable as the site itself. Bitcoin was that crypto-currency. And just like that, the World-of-Warcraft gamers, hidden in their parents’ basements, had cracked online drug dealing.

Silk Road 2.0

Four days after authorities shut down Silk Road and arrested Ulbricht, site administrators quickly packed up shop, moved a few blocks down the road and re-launched the site, conspicuously named Silk Road 2.0, a living legacy of the original. Learning from the “fool me once” principle, founder Blake “Defcon” Benthall took the precaution of distributing encrypted copies of the code so the site could easily be regenerated if it were shut down. Funnily enough, when your e-commerce site is the illegitimate spawn of a previous, more infamous drug site, the FBI will take notice. And as sure as the sky is blue, in November 2014, Benthall succumbed to the same fate as Ulbricht, albeit not before the site had already amassed a user-base comparable to that of its predecessor with sustained sales of $8 million a month hawking such products as cannabis, cocaine, ecstasy, heroin, psychedelics, pharmaceuticals, fake passports, driver’s licenses and online hacking. The site morphed into the largest market on the internet and was eventually hacked, resulting in the theft of $2.7 million worth of bitcoins. Using commissions from the product sales, Silk Road admins slowly began paying back the money to its customers — but not before authorities seized the site. Although authorities touted this shutdown as yet another tear in the darknet digital fabric, another site, Agora, was amassing a following far larger than either of the Silk Roads. 


E-commerce site Agora launched in 2013 and has quickly distinguished itself from other darknet markets with a more permissible set of market rules, even though it still bans the sale of “poisons, child pornography, snuff images, weapons of mass destruction,” and “assassinations or any other services that constitute doing harm to one another.” As it turns out, the inability to purchase WMDs hasn’t phased Agora’s holiday shoppers. Over the last two months, its product listings have grown 20 percent to 16,137 products, according to the Digital Citizens Alliance.

While the previous Silk Road websites focused on weed, powder and pills, Agora has forged its own (less silky) road by offering paying customers several categories of armed weapons, including semi-automatic firearms. In Agora’s defense, the weapons sales are consist mainly of Europeans, who face stricter gun-control laws. The FBI, Interpol and other international policing agencies believe this permissible marketplace mentality is a real threat that’s arising from online black markets. They had yet to take notice of the darknet site Evolution.

The Evolution of Darknet

What worries analysts and authorities most about deep-web denizens is the increasingly permissible and moral bankrupt marketplaces that lurk in the darkness — and Evolution isn’t doing much to quell those fears. Though it bans child pornography like other sites, its users could give two shits about “victimless crimes” as one-fifth of its listed products are under the “fraud” category or “Guidelines and Tutorials” which offers detailed instructions for committing crimes. Furthermore, ten percent of Evolution’s products listed are stolen, such as credit cards, debit cards, login information and medical records that are readily available with proven credit limits and money-back-guaranteed working account numbers. If you’re still skeptical about your purchase, affiliate sites offer segmentation services where they will send you stolen cards from your area (so banks don’t become suspicious, obviously). One such company is McDumpals, whose logo sports a gun-toting Ronald McDonald and the slogan, “I’m Swipin’ It.” While the super-store selection of illegal goods appeals to website visitors, it’s the state-of-the-art security and anonymity on Evolution that creates loyal shoppers. Tighter anonymity and stricter escrow accounts are the byproduct of an online environment where marketplaces constantly build on the shortcomings of the last, filling in the holes and embodying the spirit of Adam Smith. Unfortunately, this has left authorities dumbfounded, with their thumbs up their asses and searching for answers.

Targeting Tor software, which keeps users anonymous, is not an option. Originally developed by the U.S. Navy, Tor is used every day in a wide variety of purposes by journalists, activists, whistleblowers and even the military. The ramifications of targeting Tor could lead to unintended damage to bystanders.

Moreover, Tor is an intertwined network of virtual tunnels enabling software developers to create new communication tools on a daily basis. Close one site and five more spring to life, each more advanced than the previous, and each stocked with sellers finding willing buyers of ever-growing product lines. Maybe it’s time we re-evaluate the fight. What the government has been doing up to this point hasn’t worked at all. Maybe it’s time we talk about drug legalization.

The Price Is Right: Bargains on Silk Road 2.0

$488 (Bitcoins converted to dollars)
5 Grams of “Highest Purity Cocaine … Direct from Colombia”

Fake Danish Passport

4-7 day effort “to hack the website you want”

Fake New Jersey Driver’s License, with hologram

One hundred grams of “Afghan Heroin Brown Powder”