Casefile True Crime - Case 76: Silk Road (Part 1)

Episode Date: February 10, 2018

[Part 1 of 3] Pennsylvania State University student Ross Ulbricht had been fascinated with mathematics and science from a young age. During his college years, he developed a new fascination with libertarianism, a political philosophy that values individual freedom above all else. For Ross, this became more of an interest – it became a way of life. ---  Episode narrated by the Anonymous Host Researched and written by Victoria Dieffenbacher For all credits and sources please visit casefilepodcast.com/case-76-silk-road-part-1

Our episodes deal with serious and often distressing incidents. If you feel at any time you need support, please contact your local crisis centre. For suggested phone numbers for confidential support, please see the show notes for this episode on your app or on our website. The Silk Road was an ancient network of trade routes that started in China in the second century BC. Via a combination of roads and sea routes, goods like silk, paper and spices were transported from the producers in Asia to markets in Europe.

Eventually it wasn't just goods that were traded, there were also ideas, customs, religions and even diseases. The Silk Road expanded throughout different continents and civilisations for several centuries, that connected Asia, Europe, Africa and the Middle East, a marketplace across the world. Two major expansions can be traced back to the Silk Road. One of these was the introduction of Buddhism into China. The second was the Black Death. The vermin accompanied some of the goods along the Silk Road, and upon the vermin were fleas.

These fleas carried the bubonic plague, also known as the Black Death, and as the fleas entered Europe, so did the plague. It's estimated that in the 14th century, between 100 and 125 million people died from the Black Death, reducing the world's population by somewhere between 30 and 60%. The Silk Road is recognised as the very first true globalisation that the world experienced. The free trade of goods and the passing of ideas and customs from one society to another. It changed everything. It would be many centuries later that a very different kind of marketplace would open up

on a modern platform, a new trade route using the same name. Silk Road Ross William Ulbricht was born on March 27th, 1984, in Austin, Texas. From a young age he was described as social, curious, kind, helpful, and resourceful. He joined the Boy Scouts and got to the rank of Eagle Scout, just like his father had. After school, Ross earned a full scholarship to study physics at the University of Texas in Dallas. He fell in love with a girl at university, and at the time of his graduation in 2006,

he proposed to her. But his girlfriend confessed that she'd been seeing various other men on the side, and all plans for a wedding were called off. Ross returned to his hometown and tried to figure out what to do with his life. He tried out for the amazing race television show with his sister, and when that didn't work out, he decided to continue with his studies. He applied for a master's degree at Pennsylvania State University, and once again he got a full scholarship.

His focus was on material science and engineering. Up to that point, Ross was deeply interested in mathematics, science, and nature. But at Penn State, his interest shifted dramatically. He joined a club that explored a subject that fascinated him to no end. Libertarianism Libertarianism is based on the concept that everything a person does should be up to them, not anyone else. Essentially, it advocates minimal government intervention in the lives of its citizens. Ross was especially interested in the theories of Ludwig von Mises and the Austrian School

of Economics, which support the view that people are their own rulers and don't need a government to regulate them. Ross adopted a very different lifestyle because of this new interest. He moved into a basement because he got it for free, and he got his clothes for free from a friend that handled a second hand store. Ross's idea was to see if he could live with nothing more than the necessities, a less materialistic life. Ross was also a part of other clubs at Penn State.

One of them was an African drumming club. During one of the clubs get-togethers, he met a fellow student by the name of Julia. Julia was 18 years old at the time, six years younger than Ross. Julia and Ross's time together is outlined in the book American Kingpin by Nick Bilton. She remembered seeing Ross and thinking he looked homeless, with his torn-up clothes and unkempt beard. Ross struck up a conversation with Julia, and one week later they saw each other again. This time, Ross had shaved his beard and was dressed more presentably.

He asked Julia out, and she agreed. They went out for dinner, after which they ended up back at Ross's basement, where Julia saw how he lived. When she asked him about his less materialistic lifestyle, Ross explained that he was part of a libertarian club, and he was experimenting. Julia didn't quite understand what libertarianism was, and Ross explained the basic concept. He used drugs as an example. Anything a person decides to put into their body should be their decision, and to no one

else's, especially not the government's. Ross's fascination with libertarianism continued, and he participated in a debate about whether drugs should be legalized or not. Ross defended the position that every person should have the free will to decide whether to take drugs. He said that many problems would stop if drugs were legalized, such as violence and turf wars, and the issue of poor quality drugs being cut with poison and dangerous chemicals. After graduating from university, Ross decided that he had no interest in pursuing a career

in science. What he wanted to do was become an entrepreneur, and develop his own business. For a couple of years, he'd been thinking of ways to put his libertarianism ideals into action. The closest he'd come was the design of a C-Stead, a permanent dwelling based at sea, outside the regulation of any government. As much as he liked the idea, it would be hard to turn into a reality. But Ross found a workaround.

He'd always been a keen computer user. Even when he decided to live a less materialistic life, he always had his laptop close by. Most of his income came from computer generated work. He'd searched for odd jobs on Craigslist, and he'd entered a partnership with a friend to run a used book website called Good Wagon Books. Ross was always on his laptop, and it was through his computer that he found a way to turn his C-Stead idea into reality. At the end of 2009, Ross started talking with someone online that had the pseudonym Arto.

Ross found Arto on a forum on a libertarian website, and they started chatting via email. Ross wondered if he could create his free trade market idea on the internet and make it untraceable, outside the control and regulations of the government. He discussed his idea with Arto, and Arto's held him that there was a way to create a website that couldn't be traced by the government, and the way to do it was through Tor. Tor allows you to enter the deep web. The deep web is essentially the internet in its entirety. The deep web is a part of the internet that is difficult to access.

No one really knows how much content is available in the deep web, but a lot remains hidden there. You can't use a search engine to get there, you can't use a normal web browser, and you can't just type in a normal web address. In order to access the deep web, you do it through Tor, which is software that works as a web browser. Tor was originally created by the US Navy. Its function was to protect communication inside the government.

They wanted a way to communicate that couldn't be traced. So Tor was created. As Arto explained to Ross, Tor provides anonymity. Once you enter Tor, you can't be traced because your IP address and browsing history are hidden. An IP address is basically the identity of your computer. Whenever you connect to the internet, your computer is given a unique IP address. If someone knows your IP address, then you can be uniquely identified, and it may be possible to determine your location.

When you enter the deep web, you need to know where you are going. It isn't like browsing Google. It helps if you know the exact name and address of the site where you want to go. And they aren't regular web addresses either. Almost every site in the deep web uses mostly a random set of letters and numbers for its address, so it complicates matters even further. Whilst the deep web has a reputation for being a place only used by hackers, hitmen, and child pornographers, there are many legitimate reasons for its use.

Some of those are privacy, to avoid websites giving your data away to marketing companies. People living in countries whose government's sense of the internet can use it. Scientists use it to speak to sources and whistleblowers to assure anonymity. Ross thought the deep web sounded like the perfect place to create an anonymous website for his free trade marketplace idea, but he still had a problem. Even if he created a website where every person that entered was untraceable, he still needed an anonymous way of paying. If people had to pay with credit cards or PayPal, they could be easily traced, and the

whole point would be lost. Ross asked Ardo about this. Ardo couldn't provide him with a straight up solution, but he did tell him a story. The story was the plot of a novel called A Lodging of Wayfaring Men. In the novel, there is a group of libertarians that want complete freedom from the government, so they create a virtual society and create their own digital currency. The online society grows quickly, to the point where the government becomes afraid that the virtual society will destroy the norms of the actual society they live in.

Ross found the story interesting and inspiring, but he didn't know how to create his own digital currency. It wasn't long until he found his solution though. Almost at the same time that Ross was having these discussions with Ardo about the deep web. Bitcoin was being created. Bitcoin is a decentralized cryptocurrency, a digital currency that exists only online. Like Ross, the creator of Bitcoin, someone going by the name or pseudonym Satoshi Nakamoto,

wanted to get the banks and the government out of the way so that people could freely make transfers of money with one another. Nakamoto started working on the creation of Bitcoin in 2007, and in 2008, the US suffered its biggest financial crisis since the Great Depression of the 1930s. Wall Street crashed, and the banks essentially lost everything, collapsing completely. Shortly after that happened, Satoshi Nakamoto declared that a new currency was coming. Nakamoto posted on an online forum on February 11, 2009, on the Peer to Peer Foundation website. Quote,

The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.

Their massive overhead costs make micro payments impossible. Nakamoto said that Bitcoin would solve all of these problems. The transfer of Bitcoin is made between one person and another. No third participant or central figure is required to control it. There are no taxes and no credits. Nakamoto's idea from the beginning was to make something straightforward, a transfer without all the hassles that most currencies have nowadays. A transfer that would be as simple as a person having something and giving it to another.

Bitcoin managed to be exactly that. Bitcoin was exactly what Ross needed. Not only was Bitcoin created with similar ideals as his own, but it worked in a straightforward way. A person could buy Bitcoins and manage them anonymously. It's sort of like cash for the internet. It's hard to trace cash back to the person who spent it. When Bitcoin first appeared in 2010, Ross had been working tirelessly in the creation

of his website for almost a year. He taught himself programming and coding and made the website from scratch. He didn't want anyone else to know about the site, because the first thing he wanted to solve there was drugs. The only person he'd shared anything with up to that moment was Richard, a friend of his from the University of Texas. Richard was a programmer, and even though Ross had tried to learn as much as possible, he was only self-taught.

So when he got stuck with coding, he called Richard. When he shared the coding with Richard, he told him it was for a top-secret project, and he didn't want any questions asked about it. Richard respected the request and simply fixed the problem, having no idea what it was for. Ross did eventually share his website with his girlfriend, Julia. After they started their relationship at Penn State University, Ross and Julia remained together through thick and thin. Julia didn't share Ross's passion for libertarianism, but she respected his views.

When Ross finished his master's degree and decided to become an entrepreneur, Julia left Penn State with him, and together they rented an apartment in Austin, Texas, his hometown. While Ross did several jobs, Julia had her own photography business, Vivian's Muse. Their apartment was her photography studio. In November 2010, Ross blonde-folded Julia. She didn't understand what was happening, but allowed him to take her. He led her to his pickup truck, and they drove for a while before coming to a stop. Ross led Julia by her shoulders, and when he finally took off her blindfold, all she

saw was darkness. She realized the only source of light was a small window, and the place seemed small and had a strong odor. Julia was confused, but soon understood what was going on when Ross showed her a large shelf that had long trays of mushrooms. Magic mushrooms. Ross showed her each of the trays, and explained that this was the place he had been disappearing to recently.

The place was a small apartment he rented that was downstairs from the landlord's house. Ross was able to rent it without too many questions getting asked. He said he couldn't keep it to himself any longer, he had to tell someone, and the blindfold was for Julia's own protection. What he was planning was big, and if he got caught, he didn't want her involved. After testing the quality of his mushrooms, Ross felt it was time. In January 2011, the website was ready to launch. He'd done the coding, the programming, the design, and he'd created the first product

to sell. The choice of mushrooms to be the first thing to sell wasn't a surprising one. Ross was a pro-drug advocate. His drugs of choice were marijuana, acid, and psychedelics, and he believed that if he was caught selling mushrooms, he would receive a lesser penalty than if he was caught dealing heroin or cocaine. The last thing Ross needed for his website was a name. At one point he was leaning towards underground brokers, but at the last moment he had a change

of heart and went for a name that described not only the market, but also emphasized the ideas behind it. That name was Silk Road. When Ross launched the website, he shared it with only one person, his girlfriend Julia. He'd already showed her the magic mushrooms and had given her a very quick summary of the website's idea. So when he opened the site for business, it made sense to show it to Julia. He trusted her.

As outlined in the book American Kingpin by Nick Bilton, Ross gave Julia a step-by-step guide on how to enter Silk Road. Once they had tour downloaded on Julia's MacBook, Ross typed in the following address, This was Silk Road's web address. Because it was on the deep web, there was a bunch of random letters and numbers and ended with .union instead of .com. Now that they were inside Silk Road, Ross allowed Julia time to take it all in. She saw the website was mostly a blank page with the name Silk Road written in green,

along with the green logo of a camel. The camel was a reference to the actual Silk Road. Merchants would travel through the Silk Road routes on camels because many were located in deserts and places with very dry weather. But other than seeing that, Julia wasn't too sure how to navigate the website. So Ross continued explaining. Ross acted like a regular buyer and went to one of the links inside the site, the Red Drugs.

Once inside the drugs classification, there was another link that read Psychedelics. Ross clicked on that link and there were his magic mushrooms, the first and only product available on Silk Road at that point. There was a picture showing what they looked like and the price. Julia asked Ross how she would go about buying the mushrooms, and Ross explained Bitcoin. He gave her the example of buying tokens in an arcade. He told her she'd go to the arcade and pay for tokens, which she could then use to play in the arcade, and there would be no way of knowing which tokens she used.

Julia understood the concept, but wasn't sure where to buy Bitcoin. So Ross went to a Bitcoin exchange site and asked for her credit card. He entered her details, and just like that, she had Bitcoins to use. The explanation seemed simple enough to Julia, but she'd received a guided explanation from Ross, the creator of the site. So her next question was, how would anyone else who entered the site know what to do? Ross showed her a how-to step-by-step guide that he'd written for that purpose, so that buyers and sellers wouldn't get lost.

The last question on Julia's mind was, how would anyone else know about the existence of Silk Road? Ross answered Julia by showing her two posts he'd written on different sites. The first one was a post he'd written on January 27th, 2011. He'd gone to a magic mushrooms forum called The Shroomery and registered an account under the pseudonym Altoid. After registering, he posted the following message. I came across this website called Silk Road.

It's a tour hidden service that claims to allow you to buy and sell anything online anonymously. I'm thinking of buying off it, but wanted to see if anyone here had heard of it and could recommend it. I found it through silkroad420.wordpress.com, which if you have a tour browser, directs you to the real site. Let me know what you think. Ross played the part of being someone who was casually browsing the deep web and came

across the site by accident, so he wouldn't be known as the creator. But at the same time, he left every piece of information one needed to enter Silk Road. As outlined in the book Silk Road by Eileen Ormsby, the link to the WordPress site that he created located on the regular internet redirected people to the actual link in the deep web for anyone using a tour browser. In the WordPress site he created, Ross used the name Silk Road 420. The number 420 refers to April 20th, the official day of marijuana. When a person entered the WordPress site, a message appeared saying, this is not Silk

Road, but you are close. Then there was a guide on how to download tour and access the actual Silk Road site on the deep web. Ross made a second web post about Silk Road two days later, January 29th, 2011. This second post was on a website called bitcointalk.org. Bitcoin was very new at this point and people were discussing the viability of it and its possible uses. One use that seemed attractive was to pay for things on the deep web.

The particular forum thread that Ross posted in was a discussion about using Bitcoin to buy and sell heroin. Ross's post read, quote, What an awesome thread. You guys have a ton of great ideas. Has anyone seen Silk Road yet? It's kind of like an anonymous amazon.com. I don't think they have heroin there, but they are selling other stuff. They basically use bitcoin and tour to broker anonymous transactions.

Those not familiar with tour can go to silkroad420.wordpress.com for instructions on how to access the dot onion site. Let me know what you guys think. These two forum posts by Ross attracted people to Silk Road on its opening day. However, no one bored anything. But it wasn't long before they were. Soon, not only were people visiting Silk Road to buy and sell, they themselves were promoting the site.

Chatter started to appear on forums and even on one online radio show. On the radio show, the host stated that 28 transactions had occurred on Silk Road in the first two weeks. There were 30 listings of different drugs and 151 registered users. Silk Road continued to grow, and less than one month later, on April 11, 2011, the number of registered users had grown to 1,000. The way a transaction was made was that the buyer would enter Silk Road, see the products available and choose what they wanted.

They'd add it to a cart, exactly like it would on any normal website, like Amazon. Then the buyer would check out and make their purchase. Once the purchase was made, the funds of the buyer would be retained by Silk Road in an escrow account until the buyer was satisfied with the purchase. Once the drugs got to the buyer's house or other place of choice, they released the funds from the escrow account to the seller. The way Silk Road made money was by acting as the third person in the transaction. Once the transaction was made through Silk Road and the funds were retained for the safety

of both buyer and seller, Silk Road charged the commission for its services. At the time, the commission was 6.23% per transaction. One of the biggest breakthroughs Silk Road achieved was allowing people to get drugs delivered to their home, like any other online purchase. Each seller had a different method of hiding drugs so they wouldn't get detected by the authorities. Some were much better at it than others. Ross's method for his magic mushrooms was to first wrap them up in a plastic ziploc

bag, then he put a second wrapping on them from his Goodwagon Books Online store so the drug delivery was disguised as a book. Lastly, he'd print out the name and address of the buyer rather than handwrite it. He believed this would look more business-like and professional, and thus would attract less attention. By April 2011, Ross was starting to make money. In order to get Silk Road running, including the creation of the magic mushrooms, the rent of the apartment to grow them, the cost of creating the website and everything in

between, Ross had invested $17,000. He'd now made that money back and had earned a few extra thousand on top. Julia was getting worried about the growth of the site. She was keeping an eye on it and noticed that some sellers were starting to sell hard drugs. During the first few weeks of operation, sellers offered mostly marijuana and psychedelics, like Ross himself was doing with his mushrooms. But now, sellers were starting to offer speed, cocaine and heroin. Julia believed that the consequences for Ross would now be much more severe if something

happened to one of Silk Road's users, or if he was caught by the authorities. The book American Kingpin details an argument Julia had with Ross. She asked, what if someone overdoses? Ross answered, we have a rating system, so if someone sells bad drugs, they get a bad rating and no one will buy from them again. Ross was referring to a new feature he just added to Silk Road. When people bought or sold, they got good or bad feedback, just like eBay. Julia responded, how are they supposed to give someone a bad rating if they are dead?

Julia also raised her concern about who was actually visiting the website. Neither her nor Ross expected Silk Road to grow as fast as it had, and it was only getting bigger by the day. Users were discussing Silk Road non-stop. The discussions had grown from Bitcoin forums and moved to websites like 4chan and Reddit. At the end of May 2011, journalist Adrian Chen stumbled across several of these posts. Chen wrote for Gawker, a well-known New York based blogging and news media site. The site's main tagline was, today's gossip is tomorrow's news.

As detailed in the book Silk Road by Alene Ormsby, Chen was on the Bitcoin talk forum when he stumbled across a number of posts talking about Silk Road. At this point, Bitcoin advocates were worried that Silk Road was giving Bitcoin a bad name, as it was being promoted as the currency to pay for drugs on the dark web. The more Adrian Chen read, the more skeptical he became. He found it hard to believe that there was a website where drugs could be sold so comfortably online. It seemed too easy.

Chen decided to follow the steps to enter Silk Road, and as he browsed through the site, he saw that there were exactly 343 different listings of drugs, with all sorts of variations. The prices varied as well. There were drugs that were very expensive, others that were the same as street level prices, and others that were cheaper. Chen believed there was definitely potential for a story, but he still remained skeptical. He wanted to talk to someone who had actually bought drugs from the site. He posted a message on the Bitcoin talk forum, stating he was going to write a story on

Silk Road, and he wanted to interview someone who had bought drugs there. Several people responded to Adrian's post detailing their experiences using Silk Road, but he also got a response he wasn't expecting. He got a response from Ross. Ross never revealed his true identity. He made a new account on the Bitcoin talk forum under the name Silk Road to message Chen. Ross asked Chen to hold off on the story, because Silk Road wanted to get bigger, but wasn't ready for the attention quite yet.

Chen said he couldn't hold off. The story was going to be written now. Unable to get the story shut down, Ross decided to contribute to it. He said that he was very proud of Silk Road and its community, and he believed Silk Road was definitely making the purchase of drugs safer. He ended with the following quote. The state is the primary source of violence, oppression, theft, and all forms of coercion. Stop funding the state with your tax dollars, and direct your productive energies into the

black market. At 4.20pm on June 1st, 2011, Adrian Chen's article was published on Gorka.com. The title of the article was, The Underground Website where you can buy any drug imaginable. As an opener, Chen wrote, Making small talk with your pot dealer sucks. Buying cocaine can get you shot. What if you could buy and sell drugs online like books or light bulbs? Now you can. Welcome to Silk Road.

Chen included photos of the various drugs available in screenshots of the website itself. The article exploded. It was read by millions. According to many, it was Chen's article that brought Silk Road to the masses. One of the people who read the article was New York Senator Chuck Schumer. Within three days of Chen's article being released, Senator Schumer gave a press conference to address Silk Road. He was filmed sitting in front of a computer visiting Silk Road himself, pointing at the

pictures of the drugs for sale and naming them. Senator Schumer quote. Literally, it allows buyers and users to sell illegal drugs online, including heroin, cocaine and meth, and users sell by hiding their identities through a program that makes them virtually untraceable. 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. It's more brazen than anything else by light years.

By cracking down on the website immediately, we can help stop these drugs from flooding our streets. Today I'm calling on the DEA and the Department of Justice to immediately shut down this site before more damage is done. The other person who gave a public statement was Senator Joe Manchin from West Virginia, who also called for the website to be shut down immediately. Both senators joined forces and wrote a letter directed at US Attorney General Eric Holder, who managed the Department of Justice and the DEA.

In response, Ross gave a public statement of his own. In the Silk Road forums, which had existed since the beginning of the site, Ross posted a message under the name Admin, which was how all Silk Road users knew him. No one knew his actual identity, just that he was Admin. The message read, quote, as many of you know, US senators are aware of the site and aiming to take it down. The die have been cast and now we will see how they land. We'll be diverting even more effort into countering their attacks and making the site as resilient

as possible, which means we may not be as responsive to messages for a while. I'm sure this news will scare some off, but should we win the fight, a new error will be born. Even if we lose, the genie is out of the bottle and they are fighting a losing war already. It's better to live one day as a lion than a hundred years as a lamb. Ross sounded encouraging and fearless on the site, but things were different in real life. The Gawker article and the subsequent public statements by two US senators brought a lot more attention to Silk Road.

In a few days, the number of registered users on the site jumped from 1,000 to 10,000 and the forums were filled with endless posts. Many users who were already using the site were pissed off at Adrian Chen's article, because Silk Road was supposed to be an underground secret. Ross was also having problems with Bitcoin. Every time there was a new purchase on the site, he lost Bitcoins out of his own account and he had no idea why. He was also concerned that the servers wouldn't be able to handle the increased traffic to

the website, so he decided to do what the senators had asked. He shut Silk Road down. It happened on June 9th, eight days after the Gawker article was published. Ross started checking all of the coding and programming he'd done until he found what the problem was. When he designed Silk Road, he had connected his own Bitcoin account to the interface of the website. In order to fix this, he rewrote the code and he was able to stop his Bitcoins from disappearing

every time there was a new purchase. Because of the fact Ross was so inexperienced and hadn't done programming or coding before, he realised there was a number of other potential problems on the site that had to be fixed as well. He reopened Silk Road on June 17th, but disabled the possibility for any new registrations. This gave him time to fix the other mistakes in his programming and coding. Existing members of Silk Road took advantage and sold their memberships off at different forums.

They went to Reddit, 4chan and Bitcoin Talk and offered their Silk Road seller accounts to whoever bid the most. On June 26th, Ross reopened registrations on Silk Road, but he made a change. The seller accounts were now put up for auction. Previously, a user could simply purchase a seller account for $500, but now the seller accounts were auctioned off, one every 48 hours to the highest bidder. Ross released a post on the site to explain this change, saying that he hoped it would mean only the most professional and dedicated sellers would have access to seller accounts.

The auctions generated a lot of action, and Silk Road continued to grow. With the release of the Gorka article and all of the attention abroad, things started to turn for the worse between Ross and his girlfriend Julia. When his Bitcoin account started draining due to the coding problem, Ross didn't leave his computer. In fact, he had barely left his computer at all since Silk Road launched. He dedicated a lot of time to his website and very little time to anything else. Then things got worse for Julia.

Ross showed her a new product on Silk Road, a seller had introduced guns. Julia completely disagreed with guns being available to buy on Silk Road. She couldn't think of any good reasons why someone would want to buy a gun anonymously. Ross believed in a person's right to defend themselves and believed that if the government could have guns, then so too should the people. Communication between the couple lessened until Julia decided to leave for a few days to visit her friend Erika in New York. Julia couldn't stop thinking about Ross and Silk Road, it plagued her thoughts to such

an extent that she ended up telling her friend Erika about the site. Erika swore she'd never tell anyone about it. Julia returned to Austin in the beginning of September 2011. She gave Ross an ultimatum, her or Silk Road. He chose Silk Road. He moved into a new apartment in Austin that still remained on relatively good terms with Julia. They still saw each other occasionally.

After the breakup, Julia invited her friend Erika to move to Austin and live with her. Erika made the move, but the living arrangements didn't last long. Erika and Julia wanted to score some acid for a night out, so they went to a place where they knew they could get it easily. Silk Road. Erika had a really bad trip which landed her in hospital. Julia didn't go with her, and when Erika got out, her and Julia had a huge fight. Ross happened to be at Julia's apartment visiting at the time, and he got in between

them. He ended up grabbing Erika and pushing her out of the apartment. Erika returned to New York, and the next morning, Ross checked his Facebook account. There was a post on his wall from Erika that read, I'm sure the authorities would like to know about Ross Ulbricht's drug website. Ross panicked and deleted the message as fast as he could. He called Erika and told her that it was very sorry for what had happened. He was in tears and pleaded with her not to tell anyone else.

Erika agreed and then hung up on him. Ross was angry. He told Julia that she had betrayed his trust, and now he had to leave Austin because of her. Ross sold his pickup truck, and then got as far away from Austin as he could. He went to Bondi in Sydney, Australia. As Silk Road's creator, Ross Ulbricht was leaving Austin headed for Sydney, Australia. A new person started lurking on Silk Road.

It all started in June 2011, around the same time that the Gawker article came out. A customs and border protection officer that worked at O'Hare International Airport in Chicago was going through the mail when he came across an envelope that had a pill of ecstasy inside. Most officers would have seized the pill, filed a report, and not much more would have come of it. Customs were costly, and time and resources wouldn't be committed to a single ecstasy pill.

There would need to be a lot more pills for the case to be taken seriously. But this particular customs officer decided to call the Homeland Security Investigation team in Chicago. The Homeland Security Officer that answered the call was Jared Duyagian. What most Homeland Security officers would do if called about a single pill of ecstasy found in the mail would be to say, tell someone who cares. But Jared was very new at his job, he'd only been at it for a few months, so he listened to what the customs officer had to say.

It turned out that the ecstasy pill was just passing through Chicago, it was actually headed for Minneapolis, 400 miles away. So if Jared investigated that single pill, he'd have to travel all the way to Minneapolis to speak to the person the mail was addressed to. Jared thanked the customs officer for the call, but explained he couldn't travel to Minneapolis for one pill. However, he did tell him to call him again if a pill or any other drug came through the mail that was actually headed for Chicago.

This happened a four month slider, on October 5th, 2011. The customs and border protection officer came across a small envelope that had the name and address printed from a computer. Jared had always believed that printing names and addresses from a computer looked more business like and less suspicious than handwriting them. But on this occasion, it was actually the reason the border protection officer thought the envelope looked suspicious. It was only a small envelope, and normally envelopes of that size had the name and address

handwritten, so that's what got the officer's attention initially. Then he saw the envelope came from the Netherlands, a country known for drugs. Lastly, when he felt the envelope, he felt a small bump. He filed a report that authorized him to open the envelope, and inside he found a pink ecstasy pill, just like he had four months earlier. But this time, the pill's destination was Chicago. So the customs officer called Jared from Homeland Security again. Jared drove to O'Hare Airport and seized the pill.

In order to attend the address the pill was headed to, he'd have to go with his supervisor. Since Jared was so new at his job, he was assigned a supervisor to watch over him for the first year. The supervisor authorized the visit, and a week later they drove to the address where the pill was headed, on the north side of Chicago. They knocked on the door and a young man answered. Jared asked for David, since that's who the envelope was addressed to. The young man said David was his roommate and he was at work.

Jared pulled out the envelope with the pill and showed David's roommate. The roommate told Jared that he knew about the pills. He said they came from a website, Silk Road. Jared had never heard of Silk Road, and he asked the roommate what it was. The roommate gave a basic explanation of the site and how it worked. He said they had purchased marijuana, meth and ecstasy from it in the past. Jared left the house confused. He didn't understand how such a website could exist.

He returned to the office and searched for open cases on Silk Road, but he found none. He then typed Silk Road into Google to see what he could find. He found the Gorka article and read all about it. He also found instructions on how to enter Silk Road. The site fascinated and petrified Jared at the same time. He couldn't stop thinking about it, and a few days later he made a decision. He was going to build a case against Silk Road. He went to his supervisor and presented him with an idea.

He knew that a single pill would never be taken seriously, but what if he collected a large amount of drugs? Then it would have to be taken seriously. Jared's supervisor allowed him to take on Silk Road as a side project, so Jared started collecting drugs. He went to see the Customs and Border Protection Officer at O'Hare Airport and asked him to keep every single envelope that had drugs inside. Every night, Jared drove to the airport and collected whatever drugs had been found.

In about two months, he had 100 envelopes. At the end of November 2011, Jared felt he had enough to make a case, and together with his supervisor, they met with an assistant US attorney in Chicago. After following his detailed in the book American Kingpin by Nick Bilden. Jared entered the office, opened a backpack, and threw 30 envelopes onto the floor. The assistant US attorney just looked at him, confused. Jared picked up each envelope and placed them on the desk. This one had LSD, this one had amphetamines, this one ketamine, this one heroin.

The assistant US attorney was astonished that all of those drugs had been bought online and then delivered through the mail, but still, he thought they might be bigger fish to fry. Jared was ready for that response and had prepared a speech. Jared said, this isn't about the drugs, this isn't about that one little pill, this is about the site overall and what it stands for. It's about how the people on this site are using our internet, built by the United States government, to run an anonymous web browser, also built by the United States government,

and they are using the United States postal system to circumvent the laws of our country, and there's nothing we can do to stop them. This is just the beginning, it's drugs now, that could be used for terrorism next. Imagine a worst case scenario where a group like Al Qaeda uses the site or the exact same setup to coordinate attacks against America, all with tools built by the United States. The words sunk in with the assistant US attorney and after a moment of consideration, he told Jared that yes, he could do it, he could open a case on Silk Road. Jared made his plan and that December he got into Silk Road and registered an account.

He started what he called profiling. His ultimate goal was to find out who ran Silk Road, but in order to reach that person, he had to first start with the community. To begin with, he decided he would pose as a buyer and purchase drugs. By doing this, he expected two things, one was that he would be able to start profiling sellers by identifying their listings on the site, their communication through messages and their packaging techniques, and second, he would be able to gauge how much drug trafficking actually occurred on Silk Road.

After completing a lot of paperwork to get authorization to buy drugs, Jared was given $1,000. He went online to a Bitcoin exchange and traded the dollars for Bitcoins. He bought a total of 18 different drugs from 18 different sellers in six different countries, including Ecstasy, Opium T and Synthetic Marijuana. Jared had the drugs delivered to a secret post office box at O'Hare Airport. He knew the drugs were sent through the mail, but he didn't know how many packages actually made it to their destination.

After he made his purchases, Jared got his answer. Out of the 18 packages that he bought, only one was intercepted by Customs and Border Protection. Another package never arrived, and the other 16 was safely waiting for him in his post office box. Before he left Austin and headed to Bondi, Ross Ulbricht had to take care of a loose end. Richard Richard was his friend from the University of Texas, who he had called to help with the programming and coding of Silk Road in the very beginning. Ross had refused to tell him what the programming and coding was for.

Richard agreed to help and didn't ask any questions. But when Ross asked him for more help, Richard refused. He said he wasn't going to help him anymore unless he knew what the project was. Ross couldn't handle the coding and programming on his own, so he had no choice. He told Richard about Silk Road. Richard found it interesting and agreed to continue helping. Ross gave him drugs as payment for his services, and Richard also bought drugs on his own from Silk Road. But after a while, Richard started to fear the consequences of being caught, and he stopped helping.

Ross knew Richard was a loose end, and he paid him a visit before leaving for Australia. He told Richard about Erika's move to Austin, the fight that happened with Julia, and the post Erika had written on his Facebook wall. Richard's fear increased tenfold after hearing that, and he asked Ross to shut Silk Road down. He told him it wasn't worth going to prison for. But Ross told Richard he couldn't shut it down, because he'd given Silk Road to someone else. He didn't run it anymore. He was lying, Silk Road was still his.

But this was his idea of tying up the loose end, pretending he no longer ran the website. Since everyone's identity on Silk Road was anonymous, he told Richard he didn't even know who the new owner was. Richard believed him, and Ross then made the move to Australia. Ross lived in Bondi with his sister. He continued to manage Silk Road under the cover of doing online freelance work and day trading, so people weren't suspicious as to why he was always on his computer. It was while living in Australia that he was contacted by a new user on Silk Road. Ross had people who helped him with the Silk Road forums as moderators, and he had new program as he had found on the site working for him as well.

But he still had a lot of problems and security breaches, and it took one person to point them all out. Ross was contacted by someone who called themselves Variety Jones. He told Ross that he stumbled upon Silk Road after reading the Gorka article. He found it hard to believe that such a website could exist without being seized by authorities. So he made his way into the Silk Road service, like a hacker would, and he checked the files of the site to make sure it wasn't actually being run by law enforcement. Variety Jones' suspicion was that if the site hadn't been seized, then perhaps it was a trick by the police or the DAA. But when hacking the site, he discovered it was actually genuine, so that led him to contact Ross, or Silk Road's administrator, as Variety Jones knew him. When he first introduced himself, Variety Jones said,

There isn't anyone who knows me, even a little bit, that would ever dream of crossing me. If they did dream of it, they would wake up and call to apologize. This got Ross' attention. The first matter Variety Jones wanted to address was the security of Silk Road. Ross already knew security was his biggest weakness, and he was more than eager to listen to what Variety Jones had to say. But before he got into security, Variety Jones wanted to make sure Ross knew what he was dealing with. He said, Not to be a downer or anything, but understand what we are doing falls under US drug kingpin laws, which provides a maximum penalty of death upon conviction.

The mandatory minimum is life. Ross had done his own research and already knew what was at stake, so his answer to Variety Jones was, Balls to the wall and all in my friend. And with that, the two men formed a friendship, even though they had no idea who the other person really was. Variety Jones gave Ross all sorts of advice and acted almost like a mentor. He seemed to have far more experience and knowledge in almost everything than Ross. Their conversations were recorded in chat logs and are highlighted in the book American Kingpin. Ross asked Variety Jones,

What are my strengths? Jones answered, You play your cards close. You really do get that it's gone from fun and games to a very serious life or death lifestyle you've created. Ross then asked, What are my weaknesses? Jones answered, Your inability to discern between a garter snake and a copperhead and the gaping holes in your knowledge of security. Ross didn't understand the reference about the snake, so Jones explained,

Recognizing something is dangerous when you think it's harmless. At first, Ross and Variety Jones talked every few days, then every few hours, then every few minutes. Variety Jones was soon making joint decisions with Ross regarding Silk Road, and he slowly started to ask about his personal life. In one instance, he asked Ross, In real life, is there anyone with a clue at all that you, whoever you are, started the Silk Road? Girlfriend, boyfriend, bunny you talk to, online buddies who you've known for years, grandma, priest, rabbi, stripper. Ross's reply was, Unfortunately, yes, there are two.

One person I'll probably never speak to again, and the other I'll drift away from. Never making the mistake of telling someone again. Some days after that conversation, Variety Jones came up with an answer to Ross's problem. He always seemed to know what to say and when to say it. He asked Ross, Have you seen The Princess Bride? The Princess Bride is a fantasy family-orientated film from 1987, based on a book by William Goldman. Ross said that he had seen it.

Variety Jones said, So you know the history of the Dread Pirate Roberts. The Dread Pirate Roberts was a character in The Princess Bride. It wasn't one man, but a series of individuals who passed the name and reputation on to a chosen successor once they are wealthy enough to retire. And because of that, no one ever knew who the original Dread Pirate Roberts was. Variety Jones told Ross, You need to change your name from Admin to Dread Pirate Roberts. He said by doing so, Ross could maintain his story that he had given the sight to someone else.

And all he knew was that the person he gave it to went by the name Dread Pirate Roberts. Ross loved the idea, and on February 5th 2012, Silk Road Admin announced that they were going by a new name. Dread Pirate Roberts. The name became a quick success. The Silk Road community understood the reference to The Princess Bride and believed that it was indeed a perfect name on so many levels. Most of Ross's employees, none of whom knew his real identity, started calling him Captain. One of his programmers told him, We really can change the world.

We are really lucky. This opportunity is on a scale of a few times in a millennia. All of his employees said that they had the same aim as Ross, to legalize drugs, and to ensure that future generations wouldn't spend their lives behind bars for selling or using drugs. One year after opening, Silk Road was continuing to grow at a rapid rate. In December 2011, drug sales totaled $500,000 per month. Three months later, in March 2012, drug sales had increased to $500,000 per week. Ross was making a lot of money with his 6.23% commission.

But not everything was perfect. There were problems in the community itself between buyers and sellers, involving lost packages and disputes with transactions. And it wasn't a secret that Silk Road's security was lacking. On one occasion, a hacker stole $75,000 worth of Bitcoins from the site. Ross struggled to keep calm. He had a few panic attacks, and he constantly bit his nails. He went on a holiday to Asia, but he told Variety Jones that he was unable to enjoy the trip at all. He had to constantly check on Silk Road no matter where he was, and Wi-Fi wasn't the best where he visited.

Not only that, most of the places that had Wi-Fi were extremely busy, and Ross had a rule. If someone could peer over his shoulder, he would move location, so no one could see what he was doing. Something else that had added to his nerves was that some Asian countries had the death penalty for drug offenses. So it wasn't a very relaxing holiday. Ross returned to Australia after a month in Asia, after which he had a discussion with Variety Jones about the money they were making. Variety Jones was estimating how much they would be making by the end of the year, but Ross interrupted him and said that money won't be worth much if we're behind bars.

Variety Jones said that they needed to come up with a plan. One of the first things they decided had to happen was for Ross to lead a healthier lifestyle. He basically lived on his computer, so Variety Jones recommended that he take long walks, eat healthier meals, and have longer meditation times. Ross also decided to leave Australia and head back home. On April 10th, 2012, he returned to Austin, Texas. While Ross was returning to Texas, the investigation into Silk Road by Chicago-based Homeland Security Officer Jared Der Yeaghin was going slower than he would have liked. He was working on profiling the sellers, but it wasn't easy.

Every time an envelope with drugs was found by Customs and Border Protection, Jared would drive to O'Hare Airport to get it, no matter what time of day or night it was. Then he would photograph everything, fill out a seizure form, and stack it up in his office. By now, he had over 500 different envelopes, and he had pictures of the sea's drugs stuck all over his walls. Once he seized the drug, he went on Silk Road and searched the drugs on display from each seller to see if he could match them to the drugs intercepted by Customs and Border Control. All of this took a long time, and on top of that, both sellers and buyers at Silk Road were getting smarter. When it came to buyers, many would use PGP encryption, which turns any text the person enters into an undecipherable block that can only be opened and seen by the person it's addressed to by using a private key. When it came to sellers, they used every imaginable trick to send a drug so they wouldn't be found. One seller put pills inside a hollow marker pen, another put cocaine inside hollowed-out batteries, another put their drugs in the glue behind a shampoo sample inside a magazine.

Heroin was often sent folded inside some sheets of A4 paper in an envelope disguised as coming from either a real estate agent, a bank, or a travel agent. It couldn't be detected when touched. As outlined in the book Silk Road by Eileen Ormsby, most packages got through Customs, but some were intercepted. This was known to Silk Road sellers, and one of them slipped a note inside his envelopes, which read, If you are the intended recipient, please use responsibly. If you are law enforcement, go fuck yourself. Sellers on Silk Road had their own secret section in the forums called the Vendors Roundtable. In order to become a part of the Vendors Roundtable, a seller needed to have proven qualifications, which meant they required a good sales record over a certain period of time. In the Vendors Roundtable forum, sellers gave tips to one another on how to hide their drugs, and which method worked best for what.

They would also discuss ways to make sales more swiftly, and other things to make life easier for them all. They understood that they were competing with each other, but at the same time, they were also part of a community, and when one of them won, everyone won, so they didn't mind helping each other out. Another issue they discussed in the Vendors Roundtable was the presence of suspicious buyers, buyers who threatened sellers requesting more drugs, or they'd give bad feedback, and buyers who gave off what they called bad law enforcement vibes. Despite the fact that sellers held each other out on the forum, they also took precautions. If a seller wanted to make a purchase of their own from Silk Road, they always created a separate buyer account. Although most Silk Road sellers respected one another, giving your address away to a fellow dealer was never a good idea. All in all, the Silk Road community was becoming more professional as it grew. It continued to generate more press as well.

Since that first article appeared in Gorka one year earlier, Silk Road was now being covered repeatedly by networks such as NPR, ABC, and several others. Eileen Ormsby describes in her book Silk Road that a lot of journalists who visited the site were surprised at the discussions taking place on the forums. It wasn't filled with the dropkicks and trolls they were expecting. There were well thought out intellectual posts, discussions, debates, and even forum threads dedicated to charity. There were discussions about harm minimization that a doctor participated in. There were posts from terminal cancer patients thanking the dread pirate Roberts for creating a place where they could get access to cannabis to help live out their days more peacefully. Posts from people who said their use of drugs was much safer now thanks to Silk Road. It was becoming a thriving community. It was by no means a place filled with just crackheads and criminals.

Homeland Security Officer Jared DeYagian saw all of this and he was worried about the slow progress of his investigation. While Silk Road was only getting bigger, brighter, and better by the day. He also worried that if more people were finding out about the site then more law enforcement agencies would want to build a case to shut it down. And he wasn't wrong. There were already other agencies trying to build cases on Silk Road as detailed in the book American Kingpin. Jared found out about it one afternoon in June 2012. He was sitting in his office going through some envelopes when he heard a beeping sound coming from his computer. It was a notification that someone was reading his case. When he checked who, he saw that it was two agents from the Homeland Security Office in Baltimore.

Very soon after that Jared's supervisor received an email saying that the Baltimore agents were traveling to Chicago to discuss the Silk Road case and they were bringing their U.S. attorney with them. Jared and his supervisor agreed to the meeting. The meeting didn't involve much of a discussion. The agents from Baltimore explained that they had turned a dealer who had given them a list of names that belonged to sellers on Silk Road. They planned to go after those sellers and they were certain that one of the names they had belonged to the owner of Silk Road. Jared told the Baltimore agents they were making it sound way too easy. They had no idea what they were dealing with and they had no respect for Tor or for Bitcoin. Jared was shut down by the U.S. attorney from Baltimore, who told him that Baltimore would be leading the investigation, but he was welcomed to help if he had something important to add.

Jared's supervisor responded, Here's what we're going to do. You guys are going to go your way, we're going to go our way, and we'll de-conflict when we have to. De-conflict meant having a de-confliction meeting, which was a meeting with several representatives from the government who listened to all agencies involved in a case. And then decided who got to lead it. The Baltimore team agreed and both parties went their separate ways. Not before the Baltimore team said they were pretty sure they would have Silk Road shut down in a matter of weeks. But it turned out that the list of Silk Road sellers the Baltimore agents had was nothing more than a dead end.

They did have something going for them though, or not something, someone. The Baltimore investigation had originally started in January 2012. The Baltimore Homeland Security Investigations team had their informant who gave them the list of sellers, but they weren't used to tackling drug-related cases, so they asked for help from the DEA. And the DEA offered them one of their agents, Carl Force. Most of Carl's work was done in an office. He'd done field work and worked undercover previously, but he developed a few bad habits along the way,

including a drug habit. So he took some time off, and when he returned to work, he was put behind a desk. In January 2012, Carl's supervisor informed him that the Baltimore Homeland Security team were going to build a case against Silk Road, and he was asked to assist them. Carl had heard about Silk Road before, and he'd done some Google searches on it, which led him to the Gawker article written by Adrian Chan. Carl believed it was a huge case, but he had no specialized computer knowledge, so it wasn't something he could handle. But when the opportunity came up for him to assist Baltimore's Homeland Security team with the case, he jumped at it.

One of the first things the Baltimore Homeland Security agents showed Carl was how to download Tor and how to access Silk Road. Once Carl was inside Silk Road, his interest grew further and further. Every day after work, he closed himself up in a spare room at home, and he searched the site and read the forums to learn everything he could. The Baltimore Homeland Security team believed their best bet was to arrest dealers who were selling on Silk Road, and eventually that would lead them to the site's creator, the Dread Pirate Roberts. But Carl Force came up with his own plan. First, Carl Force created a fake identity and a backstory. The story he came up with was that he was originally from the Dominican Republic,

and he knew people all over South America who could take care of trafficking drugs, ordering money, and any other dirty work. He earned $25 million per year smuggling Coke and heroin into the United States. And with that backstory in mind, on April 21st, 2012, DEA agent Carl Force registered on Silk Road with the username knob. The first thing Carl did when he registered was send the Dread Pirate Roberts a message. He said he was a great admirer of his work, and he then introduced himself using the backstory he had created. He said he believed Silk Road could be the future of drug trafficking, and he wanted to make a proposal. He wanted to buy the site.

Carl Force didn't have authorization to do this. He'd gone rogue. When the Baltimore Homeland Security agents found out, they didn't approve, but there wasn't much they could do about it. The message was already sent. They just had to hope the Dread Pirate Roberts didn't suspect anything. Meanwhile, Ross Ulbricht, aka the Dread Pirate Roberts, was busy with a number of things unfolding on Silk Road. He put a new message on the site called the State of the Road address, and it caused the problem. The State of the Road address from the Dread Pirate Roberts mentioned the media attention Silk Road was getting. He said Silk Road was never meant to be private and exclusive,

but was meant to grow and be a force to be reckoned with, so the attention was welcome, and the more people on the site, the more prosperity there would be. He called Silk Road a revolution, and said how proud he was of it. He then mentioned the escrow system, and the fact that some new members were being lured into trading outside of escrow and finalizing early. This was being done to avoid paying the commission to Ross for sales on the site. A number of schemes had been pulled off this way, so Ross had an idea to combat it. He announced that the flat 6.23% commission on all sales was gone. It was too high for transactions over $300, and that's what made trading outside of the escrow system so attractive. A seller who sold one ecstasy pill was being charged the same percentage as someone who sold a kilo of cocaine.

So instead of the flat commission, Ross announced that Silk Road would now be scaling their commissions. Orders less than $50 had the highest commission at 10%, and orders over $1,000 had the lowest at 1.5%, and there were a number of other levels in between. Ross had come up with this new fee system in consultation with Variety Jones. They thought it made it fairer for everyone, but they didn't anticipate the extreme rage that came from many sellers. Soon after the state of the road address came out, a debate started on the forums. Some were okay with the change, but most people weren't. Most sellers on Silk Road didn't identify exclusively as small or big dealers, they simply adapted to the demand. If a buyer asked for a few pills, they could get them.

If a buyer wanted a shitload of pills, many sellers could make arrangements to make that happen. But for the most part, Silk Road attracted recreational users, so most of the transactions were at the lower level, meaning they now attracted higher fees. That's why the new fee structure caused such an outrage. The Silk Road forums exploded with complaints. They also weren't happy with the fact that the Dreadpilot Roberts seemed to be so proud of how Silk Road was working, but then in the same message he was declaring that the commissions were rising and more money would be taken. Out of sellers pockets. It seemed like a contradicting message. The outrage on the forum continued until the Dreadpilot Roberts responded with this.

To those of you that are either supportive of the change or have faith in what I'm doing regardless of whether you see the point or not. Thank you for your support. I've done everything I can to earn that trust and I cherish it. To those of you chalking my actions up to pure greed and ignoring the context for the changes. I say shame on you. When have I lied? When have I cheated or stolen from anyone here? When have I treated anyone unfairly?

When have I led you astray? Why do you turn on me now when I have poured my heart and soul into this community and project? 10% on $50 orders. We're talking about an extra dollar and 88 cents. A $10 order. An extra 38 cents. Do you think this site built itself? Do you think it runs itself?

Do you have any clue what goes on behind the scenes to keep this going? Do you have any idea the risk the people operating this site are taking? Do you have any clue what we've been through to get here today? Do you have any clue what it's going to take to get through the next year? Whether you like it or not, I'm the captain of the ship. If you don't like the rules of the game or you don't trust your captain, you can get off the boat. It took some time, but most people accepted this message and went on with their sales. It wasn't like business was struggling.

Some sellers were pulling in $20,000 per month. Some claimed to be making over $4,000 per day. Despite most sellers copying the new fees on the chin and getting on with it, Ross could sense the matter wasn't over. He shared his thoughts with Variety Jones in April 2012, telling him, I suspect that several are talking about making backup plans to jump ship or create competing sites. I don't want a mutiny.

At this point, Variety Jones was handling most of Silk Road's programments and was essentially second in command. He told Ross he'd mingle with both buyers and sellers to see what the general feeling was and to see if there was any talk of a mutiny. At the same time, Ross thought it would be a good idea to run a promotion. He called it the Great 420 Sale and Giveaway. On April 20th, 2012, the world's official marijuana day, the biggest ever Silk Road sale, occurred.

The sale started at 4.20pm on Friday, April 20th and ended at 5.20pm on Sunday, April 22nd. For those 49 hours, a buyer could win a prize every 420 seconds, 420 prizes in total. The big prize was a trip for two for 12 days with $2,000 included for expenses. Every time a person made a purchase, they would earn a ticket to be added to the draw for the big prize. So essentially, the more drugs you bought, the more chances you had of winning a holiday. In addition, Ross added a 10% discount on every product. This was made possible, as Ross didn't charge commission for the duration of the sale, and he encouraged sellers to pass that saving

on to the buyers. One seller in particular was very excited about the sale. He went by the name Tony76. Tony76 had the greatest reputation out of all the sellers on Silk Road. His reviews and ratings were constantly 100% positive. No one ever complained. He was also very helpful and polite to everyone on the site. When the great 420 sale and giveaway came, Tony76 announced several benefits.

First, he offered discounts far larger than 10%. Second, he was opening up his products to international buyers. Previously, he'd only sold to US buyers. And third, he started the sale early. 24 hours before the official launch. He only had one condition, which he outlined in the following message. I can't afford to have so much money tied up in ESCO and have it affect my ability to reload on product.

If you're uncomfortable finalizing early, I completely understand, but it's not optional for this order, and I advise you to not order. Tony76 was doing what the Dread Pirate Roberts explicitly said. Tony wanted people to deal outside the ESCO system and pay him before they got their drugs. In other circumstances, buyers would have found this proposal suspicious. But it wasn't the first time that Tony76 had requested this, and everything had gone smoothly on those previous occasions. He had an impeccable reputation, and people were happy to finalize early with him.

Tony76 thrived during the sale of his products. Tony76 thrived during the sale. He was the number one seller by far. In fact, he sold so many drugs that on April 25th, he released a message for all buyers that he would be taking his listings down in 12 hours time so he could catch up on the sale orders. So if he wanted something, he had to get in quick. Buyers scrambled to get their orders in on time from one of the most trusted sellers on Silk Road.

It's estimated that Tony76 made a quarter of a million dollars in that one weekend of the sale. But no one ever got their drugs. Tony76 had used Silk Road's biggest sale to play the biggest scam anyone on the site had ever pulled off. When buyers complained, the response from the Dread Pirate Roberts was short and concise. He explained that Silk Road's escrow system avoided scams like this, and it was the buyer's decision to disrespect that system. Therefore, no one was getting refunded. Meanwhile, VarietyJones got back to Ross with some info.

He had done some digging and spoken to several people, and it seemed Ross's fears were real. There was talk of mutiny. Sellers weren't sure what was going on, but they had three options in mind. One was to leave Silk Road and move to Black Market Reloaded, a new site that had emerged that followed the same idea as Silk Road, but without any libertarian ideals behind it. Also, it was truly underground, it hadn't made the mainstream press yet,

and the owner seemed more than happy to keep it under the radar. The second option being considered was for sellers to build their own site to compete with Silk Road. And the third option was to hack into Silk Road and take over full command of it. The option that scared Ross the most was the third one. He knew that security was still Silk Road's main issue, and it was right at this time that Ross received the message from a new user called Knob offering to buy the site. Knob was the account DEA agent Car Force had created. Ross answered Knob's message, saying, I'm open to the idea. What did you have in mind?

Knob told him that in order to make an official offer, he would need to see Silk Road's financials, which included sales, upgrade costs, salaries for administrators and monitors, and any other costs. With this information, Car thought it would assist the investigation by giving law enforcement a clearer picture of just how big Silk Road was. But Ross didn't share those numbers. He was the only person with access to them. Not even Variety Jones knew the exact numbers, and he was his main advisor. Ross's answer instead was,

I think an offer for the entire operation would need to be nine figures for me to consider it. The figure Ross was asking for wasn't far from one billion dollars. Car Force nearly fell off his chair. How many drugs were being distributed on this site, if that was the asking price? He composed himself and typed a response. I could pay nine figures, but I'm not sure Silk Road is worth that as of now. Instead, he offered what he called a spin-off. The idea was to create a market for the major dealers that would be called Masters of the Silk Road. In this market, the major dealers would get to sell in hundreds of kilos.

Nob reminded the Dread Pirate Roberts that he knew a lot of smuggling routes all over the world, so he could help make it happen. He offered two million dollars to have 20% ownership of the Masters of the Silk Road. The idea intrigued Ross, and he wanted to learn more. From then on, Nob and the Dread Pirate Roberts started to get involved. Dread Pirate Roberts started to communicate regularly. Ross had no idea he was really speaking to a DEA agent, and Car Force had no idea about the true identity of the Dread Pirate Roberts. But it was a promising start to be continued.