Below is the full text of an article I wrote for The Age, which was the Focus Feature on 27 April 2012.
More Australians are buying illegal drugs from internet websites and having them delivered by regular post straight to their door. Eileen Ormsby reports on the new frontier of drug dealing.
IT’S JUST like eBay, complete with vendor feedback, sales, prize giveaways, gift certificates, and escrow and dispute resolution services. But Silk Road doesn’t sell CDs or used clothing – it’s a one-stop, internet shop for illegal drugs. Buyers quoted on the site’s forums say the drugs are cheaper and of higher quality. Customers are also keen on the fact that they no longer have to meet an unknown dealer in a dark alley somewhere.
And the delivery of drugs bought (illegally) on the Silk Road website is not carried out by a typical drug dealer – it’s done by the postman.
A growing number of people in Australia have abandoned traditional channels for buying illicit drugs in favour of purchasing them on Silk Road. Established a little over a year ago, Silk Road has grown from a relatively small operation into a thriving marketplace where consumers of illicit substances can browse listings of everything from prescription drugs to cannabis, methamphetamine, cocaine and heroin.
While Silk Road has removed the ability of casual users to determine any statistical data such as number of members or number of sales in a given period, speculation from long-time members in the site’s forums suggests there are more than 100,000 active buyers and 5000 transactions a week worth an average of more than $100 each.
Statistics for the forums (that require a separate account and login details) are readily available and show nearly 11,000 new registrations so far in 2012, compared to about 8000 registrations for the whole of 2011.
While not as simple as typing a URL into a browser, any reasonably tech-savvy person can find their way to Silk Road. Buyers place orders with sellers located in Europe and the US with the click of a button, and have the goods mailed directly to their home. Most orders arrive within two weeks, carefully vacuum-sealed and placed in a regular business envelope, greeting card or padded envelope. And all under the noses of police, Customs and Australia Post.
”It’s a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen,” US Democrat senator Chuck Schumer said a few months after the site’s launch in 2011. “It’s more brazen than anything else by light years.”Twelve months later, at a time when experts are declaring the so-called ”’war on drugs” to be a comprehensive failure, Silk Road is more brazen than ever. Users can now purchase gift certificates for their friends. And at 4.20pm (Greenwich Mean Time) on April 20, the site took the bold-faced step of holding what it called the ”420 Sale and Giveaway” (”420” being the colloquial name for marijuana) during which it offered a prize to buyers – such as a voucher, an iPhone or a MacBook Air – every 420 seconds until 420 prizes had gone.
For the duration of the event, the site’s owner, known as ”Dread Pirate Roberts” waived commission on all sales, and vendors offered further discounts on their wares. It finished with a draw for the grand prize of a holiday for two to ”paradise” which included $2000 spending money.
It was no less than blatant nose-thumbing to the authorities. It also followed a report released earlier this month by think tank Australia21 that said the tough-on-drugs policy had failed and that other options for controlling drugs, such as decriminalisation or regulation, should be considered.
The report, which was backed by two former premiers, a former chief minister, a former national police chief and other eminent Australians, says the law-and-order approach to drugs cannot possibly stop a growing trade that thrives on its illegality and black market status.
“The international and Australian prohibition of the use of certain ‘illicit’ drugs has failed comprehensively,” the Australia21 report says.
“By making the supply and use of certain drugs criminal acts, governments everywhere have driven their production and consumption underground and have fostered the development of a criminal industry.”
Monica Barratt, a research fellow at the National Drug Research Institute, who specialises in understanding how drug trends are affected by the internet, came across Silk Road while researching her PhD thesis. “I was pretty astounded,” she says.
Barratt’s studies into Silk Road and similar websites have strengthened her belief that supply reduction methods currently in use in Australia have failed to adequately respond to the challenges of new technologies.
“It’s pretty clear from looking at the forums that Australians are very interested in the site and I think it’s pretty clear that they’re successfully using it,” she says. “Silk Road should actually prompt us to reconsider prohibition in its totality.”
This does not necessarily mean full legalisation. She says there are several ways to do this using models between the two extremes. “I think it has to be evidence-based. I think we have to tread very cautiously.”
She says the situation in Portugal, which decriminalised the possession and use of personal supplies of all drugs in 2001, although not perfect, is worth looking at. For users of Silk Road, any risk of getting caught is offset by competitive pricing (cocaine and ecstasy sell for about a quarter of Australian street prices), the quality of the product and the ease of ordering. Customers are quoted as saying the site’s lively forums discussing sellers and providing independent scientific testing of their wares make for a safer experience than the traditional back alley or lounge room deal.
Barratt agrees that on this front Silk Road is probably safer than an illegal face-to-face deal. “Assuming they’re buying from a reputable seller and it’s someone who doesn’t want to risk their rating by selling something that wasn’t what they said it was, then you’ve got a system there where the seller has a really strong imperative to do the right thing by the buyer.”
She also points out that Silk Road has an entire forum dedicated to drug safety, with advice on harm reduction and best practices. “There are a number of threads there [by users] seeking help and safer ways of injecting.”
Some buyers say it is also important to minimise threats other than health risks that are associated with illegal drugs, such as the possibility of violence. The feedback and dispute-resolution systems also reduce the likelihood of being ripped off.
As with eBay or Amazon, the credentials of the seller can be checked through the user-feedback system before an order is placed. Payment is placed in escrow until the goods are received and any disputes can be referred to the site’s administrators for resolution.
Silk Road can only be accessed through The Onion Router (TOR), a program that protects identities and makes IP addresses untraceable. While TOR and programs like it are important tools for freedom of expression, allowing people in suppressed countries to obtain or disseminate information without fear of exposure, the flipside is that it gives access to the ”darknet”, a place where criminal activity can take place without detection.
Because of this anonymity, several vendors are happy to discuss their experience via private message. All say they prefer selling through the website rather than face-to-face dealing, partly because it increases their market to anywhere in the world that has computers and internet connections, but also because of the reduced risk of violence.
Last week, after a two-year operation by US drug enforcement agencies, eight men were arrested in the US, the Netherlands and Colombia in connection with a similar site – The Farmer’s Market – that also sold illicit drugs online. The Farmer’s Market accepted various forms of payment, including cash, Western Union and PayPal, and it is likely the electronic trail left by such methods led to the arrests. The only accepted method of payment at Silk Road is Bitcoin, the encrypted virtual currency used for online gaming, which is supposed to prevent financial transactions from being traced.
Buying Bitcoins (worth $5.30 each) is anonymous and simple – some customers use a hotmail account to request a quote, and then make a direct cash deposit at a local bank branch. With the anonymity provided by TOR and Bitcoin, and vendors who are expert at packaging drugs to avoid detection, it seems little can currently be done by Australian law enforcement bodies to prevent end-users making online drug purchases.
Efforts are being made, however, to develop partnerships with overseas agencies to combat this kind of online crime. Last year, senior members of the New South Wales fraud and cybercrime squad met with US Secret Service officials in Washington and discussed several common targets, including drugs being sold over the internet.
How successful such partnerships can be remains to be seen.
The Australia21 report poses the questions: “How can drug prohibition succeed in the community when it cannot even succeed in keeping prisons free of drugs? How can authorities stem the flow of drugs, when drug traffickers are better funded than drug law enforcement?”
Another question Australia21 might have asked is how can prohibition succeed when technology allows sites such as Silk Road not only to exist, but to flourish.
“Drug use and the demand for drug use isn’t changing, so if for some reason Silk Road is suppressed or removed, there will just be another supply channel pop up,” says Barratt.
Her research has led her to conclude that there are four possible ways to stop sites such as Silk Road from selling drugs online. One is to try to regulate overseas internet content through the federal government’s proposed internet filter. But she doubts whether the filter, should it eventuate, would have any effect on Silk Road because it operates in what is known as the “hidden web”, also known as the darknet.
A second strategy is to ban the technologies necessary for Silk Road to work – TOR and Bitcoin. But she says this is unlikely to be possible because both are peer-to-peer technologies and it is difficult to imagine how such a ban could be enforced.
The third is to increase scanning of posted letters and parcels. But she says while scanning of parcel post has been increased over the past few years, it is not clear how effective such measures are and what impact they have on the speed of the postal system.
While the detection of drugs in the mail has increased, Australia Post does not have the resources to effectively scan every piece of the estimated 5 billion mail items it handles every year – LSD, for example, is distributed as invisible dots on a sheet of ordinary-looking paper.
Asked what action it was taking to combat the increasing delivery of drugs by mail, a spokeswoman for Australia Post said: ”This is a matter for the Australian Federal Police and law enforcement agencies.”
The fourth is for law enforcement agencies to infiltrate Silk Road to gather intelligence. “I’m absolutely 100 per cent sure the AFP and CIA are aware of it,” Barratt says. But she also wonders how effective such agencies can be in disrupting the Silk Road market.
Australian Crime Commission chief John Lawler says the commission is aware of online marketplaces such as Silk Road and is working with several government and law enforcement agencies to combat high-tech and ”technology enabled” crime.
”Drug deals once occurring face-to-face are now able to be conducted online, with the seller and the buyer never having to meet face-to-face,” Lawler says. ”This provides both parties a perception of anonymity and safety. It also provides organised criminal networks with the largest potential client base ever available.”
Chris McDonald, an associate professor in computer science at the University of Western Australia and Dartmouth College in the US, says the federal government ” has no chance of beating existing encryption technology such as the TOR network”.
Indeed, he says it is unlikely that anyone has the technology to crack Silk Road at the moment and, even if it did, privacy laws would not allow governments to compel the site’s owners to hand over encryption codes.
According to its annual report, the AFP seized more than five tonnes of illegal drugs last year. It is unlikely that Silk Road and sites like it are making much of a dent in the wholesale traffic trade to Australia – yet. But as Barratt points out, it is becoming increasingly clear that online drug marketplaces pose unique challenges for drug prohibition.
”Silk Road is a new frontier in drug distribution,” Barratt says. ”What we don’t know is how popular such sites will become and therefore how much influence they have. Regardless of what happens next with Silk Road, its existence has changed the possibilities of drug distribution into the future and therefore how law enforcement bodies will have to work. Policy-makers must keep these challenges in mind when considering alternative ways to control and regulate drugs.”