“We will be an adversary not to be trifled with. We have big plans for Atlantis, and we’re here to stay.”.
As online drugs marketplace Silk Road sustains blows from an ongoing attack its owner says “appears to be DoS in nature,” the forums are awash with queries, rumours and speculation about newcomer, Atlantis Marketplace. Is it responsible for the attacks on Silk Road? Is it a better, more stable alternative? Who runs it? Is it just one great big honeypot for law enforcement agencies to gather intelligence on drug dealers?
There is something a little bizarre about chatting to directors (yes, they have a board) of an underground black market about their company model. But that’s what I did last night when two of the founders of Atlantis, ‘Loera’ and ‘Vladimir’ answered my questions in real time (over encrypted chat, naturally).
Atlantis, a darkwebsite selling (mainly) drugs, is apparently a proper business venture, complete with business plan, profit forecasts and a long term strategy to claw the lion’s share of the online drug market away from incumbent leader, Silk Road. But they are not, they claim, in any way responsible for the DDoS attack on their rival.
Atlantis is here, they say, “to offer the leading free market for buyers and vendors. To rapidly improve and evolve our feature set. To crush the competition.”
THE HONEYPOT THEORY
We get right to the elephant in the room – are they law enforcement, setting up a sting operation to trap and expose Silk Road’s largest vendors? The hypothesis for this theory goes something like this:
(1) Create great incentives for Silk Road’s biggest vendors to join up.
(2) Tout easy-to-use automatic encryption as a security enhancement – harvest addresses and other information from those who do not manually encrypt communications.
(3) Work with postal services to triangulate exit points of that particular profile of mail – volume from major sellers is very high and packaging can be easily profiled by making controlled purchases.
(4) Use this profile with socially engineered telling details of vendors to bust the major sellers.
Atlantis makes no apology for offering incentives to Silk Road’s trusted vendors. “We began by offering 3 months commission free to vendors on the Road to jump start the community,” says Loera. “We’ve already seeing [sic] some of the top 1% and 2% vendors making a move to cover more ground.”
The one-way PGP (i.e. communications do not need to be manually encrypted – the user enters their address in plain text and the site encrypts it for them), “simply uses the users public key to encrypt the message when the auto-encryption service is enabled,” says Vladimir. “Without the corresponding private key, no one can decrypt the message (including us or law enforcement)”.
But the fact is, many users of black markets who simply want to buy drugs and don’t want to go to the hassle of learning encryption may be reassured by the claim the site will do it all for them and hand over a plaintext address or other details.
“We don’t force our users to use any of these ‘convenience’ features,” says Loera. “They’re simply there to add a bit of extra functionality to the website for those who wish to use them”.
If it is a sting, it will be human error, not Tor or the .onion platform, that will bring down any players. But Loera thinks it would be counter-intuitive for law enforcement to use this method of entrapment.
“It’s only natural for people to be a bit sceptical at first,” he says. “However many people have made successful sales on Atlantis, and the scepticism is starting to fade”. He states that Dread Pirate Roberts (Silk Road’s founder) had to begin under the same circumstances.
I point out that this is not entirely true – at the time Silk Road started, there was no knowledge of internet drug trade outside a few uber-geeks, and no incentive for the law to create such a honeypot. Now, with global mainstream media coverage and drug dealers openly and blatantly advertising their wares online, mass arrests would be seen by the public as a win in the ongoing ‘War on Drugs’. Such sting operations in the face of public outrage are not unprecedented.
“There’s no good way to prove to the community that we’re not a honeypot, Loera concedes. “All we can do is continue to do what we’re doing, and the success stories of the community will speak for themselves”.
A NEW MARKETPLACE
Loera and Vladimir represent the board of a founding team of ‘about 5’ members, all ‘libertarians at heart’ with backgrounds in technology, business and drug dealing. “I’ve personally never been involved in the drug trade up until now,” says Loera.
As it is obvious that much inspiration (or copyright infringement if you want to be unkind) was drawn from Silk Road – from the layout of the categories to the wording of the user manuals – a natural question is whether any of the founders are ex ‘employees’ of the original site.
“We are not affiliated with Silk Road,” says Loera, “however we do have some people with close ties to administration as well as a large and growing number of their top vendors”.
Atlantis was born in March 2013 because its founders saw an opportunity in the market when Silk Road started having reliability problems and outages which became more and more frequent. “We understand that they are a huge target, but with the sums of money they turn over this should not be a problem”, says Loera. “The community has rallied behind them for long enough without any significant changes.”
The founders claim to have started their business with a philosophy of responsiveness to members’ suggestions and complaints, affordable vendor fees, scalable high-tech infrastructure, and a team with technical experience in corporate level environments. “Reliability and security are our top concerns,” says Loera. “We want sellers to be able to make sales at all hours of the day”.
Marketing started with an advertisement in the ‘Newbie’ section of Silk Road and many believe Atlantis has created multiple accounts to spruik the site across its rival’s forums. Atlantis denies this, saying it is the Silk Road outages that causes people to defect and the good customer service that makes them provide word-of-mouth recommendations.
Atlantis is unabashed in its desire to lure customers away from Silk Road. Whilst showing some level of respect for Dread Pirate Roberts for evolving the online platform, implementing Bitcoin support and taking black cybermarkets to the next level, they think he has dropped the ball, perhaps complacent in his monopoly. “There is a lot of potential in this market, and if they aren’t willing to make the big moves we will do it for them,” says Loera.
“There’s always room for competitor markets especially in a market as large as the drug trade,”he continues. “However there will always a be a leader and we want this to be us. We will do this by offering incentives for users. Innovation and listening to user feedback is crucial and will be crucial to our success”.
Roberts had previously told me he was good-natured about competition, welcoming it ‘so long as it is friendly’. I point out that some of Loera’s comments and Atlantis’ approach to marketing may be seen as less than affable.
“That’s okay, DPR doesn’t need to welcome us,” he says. “We’re more concerned with making a positive change in the community through our use of the technology. To allow the free trade market to evolve and prosper”.
In the six weeks since inception, Atlantis claims to have had 10,000 user sign-ups. Although they didn’t have figures to hand for how many of those accounts were cashed up, they were able to tell me there is currently $70,000 USD worth of cryptocurrency in circulation on the website. With a sliding commission scale of 6% of transactions under $50 to 1% of transactions over $1000, the team is not drawing a salary yet. But this is clearly not unusual in the initial growth phase of any start-up.
“It hasn’t been an issue for the team members involved,” says Loera. “They want to see the success of Atlantis”.
A NEW CRYPTOCURRENCY
One of the biggest surprises with this new market was the initial decision to deal exclusively in Litecoin, rather than the well-established Bitcoin used by Silk Road, Black Market Reloaded and other online stores. The reason, Atlantis claimed, was the teething problems of Bitcoin had been eradicated or minimised with Litecoin. But the main differences are the speed of transaction confirmation and the fact that mining is available to the average user.
Potential customers were not convinced and in less than a month Atlantis implemented dual-currency recognition, accepting Bitcoins as well. Their enthusiasm for the Litecoin, however, raises the question of whether the team has a vested interest in the fledgling cryptocurrency.
“We have the same level of interest in Litecoin as we do Bitcoin, which is why we decided to support both,” Loera says, not altogether convincingly. Atlantis hedges the wildly fluctuating currencies against their weighted average USD value on MtGox and BTC-e exchanges and is proud of its robust security measures, stating that the way cryptocurrency wallets are managed could be a benchmark secure solution for other businesses.
THE WAR ON DRUGS AND THE FUTURE OF BLACK MARKETS
Whilst their main motivation for opening Atlantis is to provide a free market to facilitate trade in illicit drugs and make a profit, they also see it as an opportunity ‘to radically change the current drug trade paradigm’.
“The board and many other people all believe the ‘War on Drugs’ is a terrible failure,” says Vladimir. I point out that an end to prohibition would logically put an end to their enterprise, as people would source drugs from legal alternatives. Loera puts a sunny spin on this, saying it would provide an opportunity for them to legitimise their business and widen the scope of their potential customer base.
“Even if this resulted in the death of our market,” he philosophises, “it would be a win for the people and the world as a whole. We believe people should have the right to choose what they do with their own bodies. Ironically, most of the drugs for sale are less dangerous then tobacco or alcohol. Marijuana is our number one seller”.
In the meantime, he points out, drug users can order compounds from the comfort of home, be certain that the item you purchased is of satisfactory quality (due to the reputation system) reduce the risk of violence. It’s a win on many fronts.
So, assuming they are not law enforcement themselves, are they afraid of getting caught? Whether through flaws in the technology the markets rely on (the onion routing protocol and cryptocurrencies) or through the sophisticated social engineering and stylometry techniques law enforcement is using on similar operations?
Vladimir says the team is well educated on police techniques and the operation has “planned for the worse and mitigated all loose ends…We adhere to a strict set of rules to minimize the risk of data leaking”.
So, I wonder, how does if feel to go from geek to drug tsar?
“It’s definitely a welcomed change of pace,” says Leora. “Adds a little bit of excitement to the daily routine”.
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