Poor Blake Benthall.

What’s a former SpaceX engineer to do when your favorite drug buying marketplace, Silk Road, goes under? Do you possibly risk going outside, into the real world,and interact with other people?No, of course not. You start a new drug empire and invite an FBI informant to be your number two on the very first day of operation.

And that wasn’t even the dumbest thing he did during the rise and fall of Silk Road 2.0.

Blake Benthall is software engineer living in San Francisco. He worked for SpaceX for a few weeks before quitting. He went to the University of Florida, bounced around a few startups, ran a tech incubator from his house, helped create a project to bring Linux to the iPod, was an eagle scout and took some awkward pictures with his very unfortunate forehead. By all accounts of what we can see, it was your average Silicon Valley engineer, fuckingaround and disrupting whatever industry he happened to bump into.

Let me play you song of my people (privileged 20-something white males living in the Bay Area).

According to the FBI’s criminal complaint, Blake seemed rather upset that the original Silk Road has closed down and wanted to be part of the team that rebooted the old code into a new incarnation, dubbed Silk Road 2.0

Here are the timeline of events of how Blake came into power at Silk Road 2.0:

• October 2nd, 2013 – The Silk Road online drug marketplace is shutdown andRoss William Ulbricht, A.K.A., Dread Pirate Roberts, is charged in federal courts of being an enormous shithead.
• October 7th – A discussion forum is set up for discussing how to re-open Silk Road. A man calling himself Dread Pirate Roberts publicly claims he’s not THAT DPR and he’sextending an offer to all the other drug dealers and vendors of the old Silk Road website to set up shop and the new Silk Road 2.0
• October 8th –THE NEXT FUCKING DAYDPR2 gives the FBI informant moderator access to the forum and control over hidden parts of the site. The entire operation is compromised before the site is even launched.
• November 6th – Silk Road 2 goes live and there is much rejoicing. DPR2 is still the admin at this point.
• November 13th – Blake Benthall, who goes by the super lame handle “Defcon” (and commonly called “Defcunt” by the other admins) gets added as a site admin. His mom prints out his forum profile and puts it on the fridge because she is so proud.
• December 20th – 3 admins from Silk Road 2get their asses hauled to jail and have federal charges files against them. DPR2 realizes what a stupid idea this was and bails on the entire operation. Blake sees this as his moment to shine! In fact, one of the admins even posts a warning that law enforcement must have infiltrated the site and to remove all coins immediately. Blake decides to reassure everyone that everything is OK.

• December 22nd – Blake decides to massively inflate his e-peen by publicly posting the SR2 forums that as the second in command he’ll be steering this ghost ship.
• December 28th – Blake says that he’s the new sherrif in charge. He promises to literally put his life’s work into this compromised illegal drug empire and formally removes any doubt whatsoever of what his role in the site would be.

From this day on it’s Blake Benthall’s site to run. And he runs it terribly. The FBI document is light on details on how exactly the FBI gained control of the servers, but since the FBI informant was forum admin since the first day we can imagine it wouldn’t be terribly difficult to find where the servers are. In fact, there’s a lot to parse in this document but for this article we’re just going highlight just how bad a job Blake did of trying to cover his tracks.

When the server was ultimately located in another country the FBI had the local law enforcement make an image of the server. While the server was down for imaging, Blake posted a message in the forums noting that he was aware of the downtime.

After inspection of the server, they located chat logs between Blake and DPR2 that carefully explained the handoff of admin duties.

The interaction between Blake and his ISP that hosted the server seems to hold the majority of the evidence against him. Because he was a colossal idiot, he used Tor and hid his tracks quite well when interacting with the Silk Road 2 website, but when it came to any other interaction with the host or management activities he did zero to cover his tracks.

He didn’t use Tor to submit support tickets complaining about the server outages and alsoused an unusual combination of abeta browser and an out of date OS.This was easy to match up the site visitor information tohis laptop..

He accessed the customer support from ahotel wifi over clearnet. He also registered the room withhis real name.

And tweeted about being at the hotel the day before.

But the most idiotic, moronic, stupidest thing he could have done was register the server usinghis own vanity email address.

Not only that, he sent private messages from the Silk Road 2 administrator panel to his personal account, removing any doubt that the owner of email account also knowingly controlled Silk Road 2 servers

All this while he was urging the vendors and users to use stronger encryptionand the site adminswere helping to lower the risk of FBI honeypots

When they did eventually catch up to Blake the trailed him at his house and matched up “Defcon’s” available/away timeouts with his time spent at home.

BONUS: Remmeber that guy that bought a Tesla with Bitcoinslast year? It was probably him too.

At this pointyou would think that Blake Benthallis the dumbest drug kingpin you’ve ever seenbut in one last ditch effort to surprise everyonehe opens his mouth and throws away his only bargaining chip.

In court, federal prosecutor Kathryn Haun said that Benthall was likely to flee and should not be released. “He was found with over $100,000 in cash at home,” Haun told the court. “He has a passport. We’re not aware of whether that was secured. In addition to all of the detail, Mr. Benthall did admit to everything after receiving his Miranda rightsthat he was the administrator of Silk Road 2.0. Our principle basis is flight risk at this point.”

…

His attorney, Daniel Blank, a federal public defender, said that he only met his client for the first time in court on Thursday.”You could fill a large volume with what I don’t know,” Blank told reporters after the hearing.

Prosecutors also reportedly found a laptop filled with customer and vendor information, stored unencrypted

After raiding his home, the FBI says Benthall’s PC (which was not encrypted in any way) had full “address lists for customers all over the world that will be of significant interest to many global law enforcement agencies.” Prior to the raid, the U.S. DEA made purchases from the Silk Road 2.0, including heroin, cocaine, LSD and Oxycodone. Each was then tested and all tested positive for illegal drugs.

Ladies and Gentlemen, Blake Benthall, chief dumbass.

The post Blake Benthall and the Terrible, Horrible, No Good, Very Bad Day appeared first on Buttcoin Foundation.

[youtube id=”NoBFhdeR9PE” width=”580″ height=”337″]

ETA: According to some dude on reddit, “It looks like they sniffed him out by looking back at old Internet records (forum posts, IPs etc) around the times of SRs appearance. The first person to ever advertise SR was DPR himself, and he used an email account attached to his natural born identity. No NSA or technical hack.”

The post The Silk Road is closed appeared first on Buttcoin Foundation.

EDIT: Don’t go into freak-out mode here! This is potentially serious, but is fixable and I disclosed to DPR alone about 15 hours ago. He’s good, skilled, and this will be investigated and fixed in no time, I am sure. In the interim, if you need to use Silk Road BE SURE TO USE GPG. The beauty of Bitcoin and Tor is that even if the server were to be seized, if your messages are GPGed, it’s near-impossible to get anything valuable. I just know that not everyone uses GPG.

I am a penetration tester by trade, and while I do not use SR, I do occasionally conduct informal tests of the security of various Tor Hidden Services.

I debated for hours whether to post this, but I need to alert the community in case no actions are taken:

Last night, while SR was down for maintenance, a brief few moments allowed a certain set of circumstances that caused me to be able to view the public IP of the httpd server of Silk Road. This isn’t an obvious flaw, but it is extremely simple if you know where to look – the server basically will publish a page containing all of the configuration data of the httpd server including the public IP address.

For the sake of the site’s security, that’s all the information I’m going to reveal.

I have messaged Dread Pirate Roberts and am currently waiting a response. I do have a SHA512 hash of the public IP which I have retained as evidence if DPR needs proof.

I will keep this updated with any news received.

With such information, authorities may be able to locate and shut down Silk Road and apprehend its operator, or more. What does this mean for Bitcoin? If the Silk Road gets busted, the only thing left to prop up the price of butts is the Magic: the Gathering Online Exchange’s creaky servers and meddling hands.

The post Silk Road fumbles and reveals its IP address appeared first on Buttcoin Foundation.

ST. LOUIS (Thomson Reuters Accelus) – Two senators are pressing federal authorities to crack down on an online black market and “untraceable” digital currency known as Bitcoins after reports that they are used to buy illegal drugs anonymously.

Democratic Senators Charles Schumer of New York and Joe Manchin of West Virginia wrote to Attorney General Eric Holder and Drug Enforcement Administration head Michele Leonhart in a letter that expressed concerns about the underground website “Silk Road” and the use of Bitcoins to make purchases there.

The letter prompted a discussion among Bitcoin enthusiasts about whether the government was capable of closing related bank accounts and thereby stifling the currency.

The senators released a copy of their letter on Monday. It cites recent media reports that some tech-savvy individuals were using an “anonymizing network” known as Tor to gain clandestine access to Silk Road and buy illegal drugs.

Silk Road buyers pay with Bitcoins and sellers mail the drugs, the Gawker blog reported. The transactions leave no traditional money trail for investigators to follow, and leave it hard to prove a package recipient knew in advance what was in a shipment.

“The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins. After purchasing Bitcoins through an exchange, a user can create an account on Silk Road and start purchasing illegal drugs from individuals around the world and have them delivered to their homes within days,” the senators’ letter states. “We urge you to take immediate action and shut down the Silk Road network.”

The DEA is “absolutely” concerned about Bitcoins and other anonymous digital currencies, agency spokeswoman Dawn Dearden said when asked for a response to the senators’ concerns.

“The DEA is constantly evaluating and analyzing new technologies and schemes perpetrated by drug trafficking networks. While we won’t confirm or deny the existence of specific investigations, DEA is well aware of these emerging threats and we will act accordingly,” she said.

Silk Road may be hard to close. It could easily move from server to server around the globe and change its Web address and name at will, while remaining accessible through Tor.

However, Bitcoins must be purchased with real money; of late, they have been selling for roughly $10 each.

Therefore, there are exchanges with bank accounts, such as the Mt. Gox Bitcoin Exchange, that the Justice Department and other law enforcement agencies may be able to target. It is this weak link that worries the currency’s enthusiasts.

A discussion thread this week on the primary Bitcoin forum was titled “Will Mt. Gox US Bank accounts eventually get frozen?” Some speculated that if the government bans transactions involving Bitcoin exchanges, a layer of shell companies might allow them to continue.

One user described this process as simply “growing pains” and asserted that the government “can’t stop a peer-to-peer service.”

U.S. law enforcers might have difficulty stopping Bitcoins without help from their peers in other countries.

While little information about Bitcoin exchanges is publicly available, an item posted on a website called Bitcoin Watch states that Mt. Gox’s bank account is in Japan, and anecdotal evidence suggests many other exchanges operate outside of the US.

Mt. Gox’s website does not list a phone number, representatives could not be reached via email.

http://www.chicagotribune.com/news/politics/sns-rt-us-financial-bitcoitre7573t3-20110608,0,6328122.story

Anyone else here remember the e-Gold fiasco?

The post Reason for today’s selloff appeared first on Buttcoin Foundation.