Posts Tagged ‘darknet’

I owe much of this post to the work of Nicolas Christin, the researcher who previously provided the analysis of Silk Road’s income. He is much cleverer than me or you. Give him a follow on @nc2y

One of the most dramatic revelations to come out of the New York Criminal Complaint in relation to Ross Ulbricht, the alleged Dread Pirate Roberts, was that Silk Road had enjoyed a turnover of $1.2 billion since its inception 2½ years ago, which equated to a commission of $80 million for its owner.

This is how we have been reporting the FBI's claims

This is how we have been reporting the FBI’s claims

Actually, that’s not exactly what the document said. What it said was:

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“Atlantis admins shut down the site and ran away with the coins. It’s the truth.” - Cicero, Moderator of Atlantis Marketplace forum

Image: bitcoinexaminer.org.

Image: bitcoinexaminer.org.

A little under six months ago – not long after they opened shop – I conducted the first in-depth interview with online drug barons Loera and Vladimir, founders of Atlantis Marketplace.  The two were excited at the prospect of not only wrenching market share from incumbent black market giant Silk Road, but also bringing new business in and legitimising the online illicit drug market space.

Last week, Atlantis announced it was shutting down due to mysterious and unspecified “security concerns”.

The announcement, repeated on the Atlantis Facebook page, official forum, Reddit and Twitter, called it “terrible news” and the owners sounded truly contrite. They gave users a week to withdraw their crypto-currency, after which it would be donated to a “drug-related charity”.  That was the last anybody ever heard from anyone representing the administration of Atlantis.

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Silk Road users have been shocked twice in the past two days when a forum member released names, addresses and order details of dozens of purported customers.

The user – first calling themselves ‘Info Wars’ and, once that account was banned, ‘Infowars’ – pounded the forums with repeats of the same post – a list of names and addresses, along with alleged drugs orders delivered to those addresses. Hundreds of posts were made before the user was banned and the forums taken offline ‘for maintenance’.

Silk Road down while the offending posts are removed

Silk Road down while the offending posts are removed

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Atlantis Marketplace has undertaken aggressive marketing of its site over the past few months, touting superior features to those offered by Silk Road.  Its aim has been to both attract new customers and lure clients away from the incumbent giant, but so far they must be underwhelmed by the response.

No stopping the Pirate (image: Forbes.com)

No stopping the Pirate (image: Forbes.com)

Attracting sellers has not been an issue.  Many of Silk Road’s top-rated vendors set up shop with Atlantis, enticed by waiver of set-up fees ($500 at Silk Road) and low commission rates (Silk Road takes a sliding scale from 10% of the first $50 to 1.5% of everything over $1000, vs Atlantis 6% of the first $50 down to 1% over $1000).  Atlantis went out of their way to verify their identities, and the vendors passed on the savings to their customers by way of lower prices.

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In Puberty Blues (the book, not the movie or TV show), there is a classic line where the protagonist’s mother warns her not to sit on the aisle at the movie theatre because “some pusher might come along and jab god-knows-what into your arm”.

An Aussie classic

An Aussie classic

Growing up I was always being warned about malevolent people who would seek me out and trick me into trying drugs, providing them for free until I was hooked.  Then they would charge extravagant prices once they had me in their evil clutches.  We had police officers coming to school to scare the bejeezus out of us with descriptions of the tricks they would use, disguising them as lollies, or jabbing us unexpectedly, with one hit leading to a lifetime of addiction and certain early death.

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“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?

Newcomer Atlantis Marketplace aims to cannibalise Silk Road's market share

Newcomer Atlantis Marketplace aims to cannibalise Silk Road’s market share

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).

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One of the most pervasive urban myths on the darkweb is that you can find underground rings of Django Unchained-style fights to the death. Some of the believers claim they give millionaire members the opportunity to attend such fights; others say there are live webcams broadcasting them, which can be accessed for a fee.

Can you watch this on a webcam?

Can you watch this on a webcam?

I’ve trawled the Onion, far beyond what’s available on the Hidden Wiki, and have yet to uncover any evidence at all.  Yet, like all urban myths, those who wish to believe insist that its true.  There’s one here  for example:

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The most successful Australian vendor on Silk Road has conned their customers out of tens of thousands of dollars

Red pill, blue pill or no pills?

Red pill, blue pill or no pills?

Aussie vendor EnterTheMatrix had a simple and effective business model.  Purchase Australia’s most popular party drugs from overseas vendors on Silk Road, add a 400% markup and resell them to Aussie Silk Road customers.  Although there were plenty of grumbles about the prices, those who wanted their drugs quickly (ETM sent by Express Post) and did not want to take the risk of importing via Customs (legal consequences are much harsher when ordering overseas) begrudgingly paid a premium.  After all, it was around the same as street prices and at least the quality of the goods tended to be consistently high.

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If small-time drug dealer shadh1 had purchased his drugs from Australians, his jail term would be less than half what he received.

As a drug dealer, shadh1 was really really bad at his job.  One of the key performance indicators is an ability to stay off the radar of law enforcement authorities, who are obliged to arrest and prosecute people who sell drugs to other people when they find out it’s happening.

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Shadh1 failed miserably at the whole stealth thing.  He allowed customers to pass on his phone number to complete strangers for the purposes of ordering drugs, kept every single incriminating text message ever sent or received and left all the paraphernalia that screams ‘drug dealer’ strewn around his house.  He ordered drugs to his home address and his own name from countries from which mail is known to be more heavily scrutinised.  When twelve pieces of mail went missing, he just kept ordering more – to the same name and the same address – without stopping to wonder what happened to the ones that never showed.  He created a vendor account on the most famous online black market in the world, choosing an unusual username – the only other place it could be found was on his BMW’s numberplate.

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Last week, after one of my articles was unexpectedly submitted into evidence in court, an odd little online publication called Vexnews published a vicious, bizarre and inaccurate attack on me.

Screenshot of the Vexnews article

Screenshot of the Vexnews article

I said I wasn’t going to give it any oxygen in my last post, but I really think it should be pulled apart for the appalling piece of journalism it is.  Let’s have a look at Andrew Landeryou’s Vexnews piece, para by para:

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