FBI Wants More Violence in Drug Markets, Shuts Down More Peaceful Online Sales Sites

The FBI's efforts to make drug markets more dependent on violence and less dependent on good customer service, quality, and reliability marches on!

After the announced takedown of the second Silk Road, which I blogged about earlier, Wired reports more drug-sale sites clobbered by the feds:

at least two other drug market sites have also been busted, and more takedowns are likely coming. The drug markets Hydra and Cloud 9 now both display the same "This Hidden Site Has Been Seized" notices as the Silk Road 2, emblazoned with the logos of the FBI and Europol. Several other popular dark net markets were down Thursday morning, as well, though they didn't display that banner. An FBI spokesperson tells WIRED that there will be more than three market seizures in total, with the full extent of the operation set to be revealed by Friday.

The string of drug market busts appears to be part of Operation "Onymous," a global law enforcement effort that has already led to the arrest of three people. Yesterday the FBI arrested Blake Benthall in San Francisco and accused him in a criminal complaint of running the Silk Road 2 drug site under the pseudonym "Defcon." Two other suspects were arrested separately in Dublin, and cops say they've seized from them $250,000 worth of drugs and as much as $2.5 million worth of bitcoin. An FBI spokesperson confirms that the arrests are part of a "coordinated law enforcement action," but not part of the same case….

Both smaller sites attracted users by implementing a bitcoin feature known as multi-signature transactions. When coins were spent on the site, they were put into an account controlled jointly by the buyer, seller, and site administrators, and two out of three of them had to sign off on that transaction to move the funds. That feature was designed in part to prevent law enforcement from easily seizing the sites' bitcoins, and may in fact limit the losses suffered by their users following these takedowns.

As of Thursday afternoon, the two largest drug markets—Agora and Evolution—were both still online.

My feature story about the first Silk Road and its takedown is in the December issue of Reason, already in subscribers' hands.