Famous Fraudsters

The landscape of fraud is constantly evolving as criminals continually develop new ways to attack businesses and customers, but fraud has always taken place…

In this series we will be profiling some of the most notorious fraudsters of all time, their crimes, and how they got away with them for so long.

Ross Ulbricht & Silk Road

The first subject in our series of infamous fraudsters is a contentious one; Ross Ulbricht is currently serving a life sentence in prison which many believe does not warrant his crime.

Ross Ulbricht is the founder and creator of the darknet market website Silk Road. Silk Road was the first modern darknet market, best known as a platform for selling illegal drugs. As part of the dark web, it was operated as a Tor hidden service, such that online users were able to browse it anonymously and securely without potential traffic monitoring. We explored how Tor networks hide its users identities in a recent blog post here.

The Dark Web is a hidden portion of the internet which is not indexed by search engines and as such, cannot be accessed by them. It is associated with illegal activity such as trading with drugs, weapons, explosives, pornography, and data. 

To access the dark web you need to use an anonymous browser. Tor (The Onion Router) browser routes your web page requests through a series of proxy servers operated by thousands of volunteers around the globe, rendering your IP address unidentifiable and untraceable. For example, if a user in Singapore is trying to connect to a website in London, that request on a TOR browser could be routed from Singapore to New York to Sydney to Cape Town to, finally, London. Tor makes both the information distributor and its receiver difficult to trace. 

Silk Road was launched in 2011 out of a need to connect illegal drug sellers with interested buyers online while protecting their identities and transactions using anonymisation techniques. Before the website was shut down by the FBI in October 2013, it provided goods and services to over 100,000 buyers. 

Through a combination of data anonymisation technology and a feedback trading system, Silk Road created a haven for drug traders. Buyers and sellers were able to brazenly conduct illegal drug transactions without fear of their IP addresses being traced back to them. All trades on Silk Road were conducted using Bitcoin which, as we know, provides an added layer of privacy due to its users trading under pseudonyms.

Ross Ulbricht was arrested under charges of being the site’s pseudonymous founder, convicted of seven charges related to Silk Road in the U.S. Federal Court and was sentenced to life in prison without possibility of parole.

In November 2020, the United States government seized more than $1 billion worth of bitcoin connected to Silk Road.

The Legacy of Silk Road

During the brief period that Silk Road operated, 1.5 million transactions were conducted, many of them for illegal goods and services, including drugs and weapons.

When being prosecuted, Ulbricht was told that he had “developed a blueprint for a new way to use the Internet to undermine the law and facilitate criminal transactions.”

As a result of Silk Road, there are signs that highly innovative new technologies may soon be launched which would allow more decentralized, peer-to-peer and generally more innovative versions of illegal marketplaces to be operated. If operational, it could be more difficult for law enforcement to take them down without shutting down substantial parts of the Internet itself.

A film inspired by Silk Road is due to be released in 2021:

How We Can Help

Here at Hello Soda, we provide a range of solutions and specialise in identity verification and fraud prevention:

  • Our cryptocurrency tools can head off criminal activity at the pass by matching customer data with transaction histories, making it easy to identify high-risk customers, remain AML compliant, and avoid the taint associated with crypto money laundering. 
  • Our leading solution to mitigate the risk of impersonation fraud, FraudWeb searches over 600 million records on the Dark Web for your customers’ information to prevent fraud from taking place.

FraudWeb provides an extra level of security by searching and monitoring customer PII against compromised data on the Dark Web.

Our global ID, KYC & AML platform, Sodium serves our complete suite of solutions via a single API. This solution enables all data sources to be cross-referenced and deliver truly enhanced customer due diligence.

Utilise a single element or multiple processes – it’s entirely up to you. Learn more about how we can help to automate and simplify your verification processes to help you to learn more about your customers. One simple integration; a flexible 360° solution which is scalable and secure.

Book a demo today and see for yourself how powerful our suite of solutions are.

 

 

 

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