FBI Shuts Down the Second Silk Road [UPDATE: Accused Operator Might Be Former SpaceX Employee]

The FBI's ultimately fruitless war against online drug sales had another minor victory for them, as Wired reports:

On Thursday international law enforcement agencies including the FBI, the Department of Homeland Security and Europol took down the Silk Road 2 and arrested its alleged operator 26-year-old Blake Benthall in San Francisco. Benthall, who is accused of running the new Silk Road under the handle "Defcon," has been charged with narcotics trafficking, as well as conspiracy charges related to money laundering, computer hacking, and trafficking in fraudulent identification documents. The criminal complaint against him alleges that the Silk Road 2 sold hundreds of kilograms of drugs of every description to hundreds of thousands of buyers around the world, with bitcoin-based sales of more than $8 million per month at the time of its seizure….

The criminal complaint against Benthall outlines how the Silk Road 2?s staff was infiltrated by at least one undercover law enforcement agent even before the site went online in November of last year. In May of this year, the FBI somehow pinpointed the foreign server that ran the Silk Road 2 despite its use of the anonymity software Tor to protect its location, and obtained records from the server's hosting provider identifying Benthall.

The complaint also traces Benthall's proceeds from his alleged management of the Silk Road 2?s bustling sales. Law enforcement officials found that he used a bitcoin exchange to cash out $273,626 between Silk Road 2?s creation in November of last year and October of this year. About $70,000 of that money went towards a down payment on a $127,000 Tesla Model S. Benthall is also accused of holding the pursestrings for the Silk Road 2?s employees:An undercover Homeland Security agent was also paid $32,189 worth of bitcoin for work the agent did for the site.

The Wired link contains a copy of the criminal complaint against Benthall.

This second Silk Road has already lost market leadership in recent months to Agora, so it is not like this destroys the online drug marketplace, but it sure cost taxpayers a lot of money and is going to mess up the lives of people just trying to help people buy and sell things they want.

My Reason feature on the first Silk Road and its shutdown is in the new December issue of Reason, in subscribers hands right about now.

UPDATE: A Facebook page of a Blake Benthall  that hasn't been updated since October 27 lists him as a SpaceX employee; SpaceX confirms that someone of that name worked for them from December 2013 to February 2014.