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View Full Version : Homeland Security Committee chairman responds to “Silk Road 2.0”



Ares
7th November 2013, 07:31 AM
US Congressmen have called for a more strategic approach to targeting black market dark web sites, after the launch of Silk Road 2.0 today.

Senator Tom Carper, chair of the Senate Homeland Security and Governmental Affairs Committee, issued a statement just hours after the reincarnation of Silk Road.

“This new website – launched barely a month after Federal agents shut down the original Silk Road — underscores the inescapable reality that technology is dynamic and ever-evolving and that government policy needs to adapt accordingly,” said Carper, whose Committee is heading a formal inquiry into virtual currencies.

Carper said that ‘whack-a-mole’ approaches to dark web marketplaces are not as effective as broader policymaking. “We need to develop thoughtful, nimble and sensible federal policies that protect the public without stifling innovation and economic growth,” he said. “Our committee intends to have that conversation – among others – at our hearing this month on virtual currency.”

Silk Road 2.0 came online Wednesday, headed by someone calling himself The Dread Pirate Roberts. This is the original name used by Ross Ulbricht, the alleged founder of Silk Road, who was arrested by the FBI.

The site uses a defaced FBI seizure notice on its login screen. This is the same as the notice displayed on Silk Road after it was closed down, except with a modification. It now reads: “This hidden site has risen again.”

http://media.coindesk.com/2013/11/silk-road-reborn.png

Straight after logging in, users are directed to a personalized welcome page, which states: “We rise again”. The ‘profile’ page has been updated, now enabling users to select two-factor authentication.

The list of products is largely the same as before, featuring items such as cannabis, ecstasy, forgeries, prescriptions and money, however, there are currently only a few hundred items for sale, compared with the thousands that were on offer on the first Silk Road.

Silk Road 2.0’s new founder said that his site was enjoying 1100 connections per second hours after launch. His site is as much about principles as it is about drug sales, he said in a tweet. “Our proceeds will fund more anonymity technology research – you don’t need drugs to care about privacy. We are freedom fighters,” he claimed.

@the_pouar Our proceeds will fund more anonymity technology research – you don’t need drugs to care about privacy. We are freedom fighters.

— Dread Pirate Roberts (@DreadPirateSR) November 6, 2013

There has been some continuity with Silk Road. The forums for the site have been operational since October 7, just days after the previous site was taken down. At least one of the original Silk Road’s former moderators is now involved with the new site, according to this Mashable interview with DPR.

The new operator claims to have better security than Ulbricht did, and says that there are measures in place to ensure that people get access to their coins, even if the site is closed. “We have learned hard lessons from the unfortunate events of recent weeks, and the man hours that have gone into this new release are phenomenal,” says a message on the site’s greeting page.

But he has competition. After Silk Road was taken down in early October, there were several sites offering alternative services to users. Black Market Reloaded and Sheep Market both offer similar services to those wanting to buy illegal goods online. BrainMagic and Drugmarket are openly displaying illegal drugs on their pages, and both are accepting bitcoin payments. The same goes for BitPharma and The People’s Drug Store.

There are also web sites specializing in marijuana alone. German has DeDope, while the Netherlands has NL Growers. Ecanna provides weed and related paraphernalia, all for sale in bitcoin. Budster, while still up, has already seen growing pains relating to the processing of escrow orders.

There are also some sites whose future is more in question. Atlantis closed down, Deepbay is not loading, and Silk Road Reloaded has been quiet for three weeks, with no demo yet. And in a sign of how untrustworthy some of these sites can be, another site called Project Black Flag closed after the organizer said that he ‘panicked’ and stole all of the bitcoins. When that site launched in mid-October, it was labeled Silk Road, and was styled after the original site.

Now, Silk Road 2.0’s rollout is nearly complete. According to its timeline, a wiki will go live on Nov 7, while bitcoin deposits and withdrawals will be enabled on Friday Nov 8. Orders may be placed from Saturday Nov 9 onwards.

US lawmakers may be looking for a more strategic approach to take down drug peddling web sites, but not all policymakers agree. Former UN Secretary General UN Kofi Annan, now a member of the Global Commission on Drug Policy, called for an end to the war on drugs this week.

“Citizens see huge amounts of their taxes spent on harsh policies that are not working,” he said in a piece for CNN, arguing that illicit drug trafficking can create opportunities for organized crime, and that the time is overdue for policy reform. “It is time for a smarter approach to drug policy. Putting people’s health and safety first is an imperative, not an afterthought.”

http://www.coindesk.com/new-silk-road-rises/

madfranks
7th November 2013, 07:57 AM
Carper said that ‘whack-a-mole’ approaches to dark web marketplaces are not as effective as broader policymaking. “We need to develop thoughtful, nimble and sensible federal policies that protect the public without stifling innovation and economic growth,” he said. “Our committee intends to have that conversation – among others – at our hearing this month on virtual currency.”

Protect the public? It's the public that wants this service! Another example of arrogant politicians who think they know what's best for us, and they need to protect us from ourselves.

Ares
7th November 2013, 08:45 AM
Protect the public? It's the public that wants this service! Another example of arrogant politicians who think they know what's best for us, and they need to protect us from ourselves.

Yep, but I have a feeling their ability to dictate to us what's best is slowly coming to an abrupt end.

madfranks
7th November 2013, 09:02 AM
Yep, but I have a feeling their ability to dictate to us what's best is slowly coming to an abrupt end.

But, they will not give up without a fight. I wonder how bad they want to squash it. Would they destroy the internet in order to accomplish this?

Ares
7th November 2013, 09:12 AM
But, they will not give up without a fight. I wonder how bad they want to squash it. Would they destroy the internet in order to accomplish this?

They might try. My guess is they'll put up capital gains taxes so high on BTC's that converting them to dollars will be pointless. So people will move to just using BTC's out right for business and trade. They might start going after businesses to report transactions done in BTC's. Might even see a few court cases. But previous cases I've seen and read in my studies for taxes is that bartering is a none taxable event as long as it wasn't a gain. Since it wasn't denominated in dollars, it was denominated in Bitcoins. The IRS forms are clear on this, they can only tax dollars. Prior to crypto currencies that's all they had experience or knowledge of. You didn't find people being paid in Russian Rubles, or Chinese Yuan in the U.S. They could amend the tax code to include Bitcoins, but that sets up a whole different problem. How can they accurately know what you're bartering with? Say it's 1 BTC, but I'll give you 75 Litecoins for the 1BTC. So your BTC transaction log will be clear as not BTC changed hands and they don't even know that you have a Litecoin wallet. You send your coins to BTC-E exchange them for a Bitcoin and either cash out in Rubles, or Euro's, or you can jsut decide to leave coin there. Or better yet open an account at BTCchina and leave your coins in that exchange off shore. You know like big businesses here in the U.S. use Ireland as a tax haven.

What MR. IRS officer? My wallet isn't located in the U.S., it's based in China, Russia,. etc.

madfranks
7th November 2013, 09:50 AM
You send your coins to BTC-E exchange them for a Bitcoin and either cash out in Rubles, or Euro's, or you can jsut decide to leave coin there. Or better yet open an account at BTCchina and leave your coins in that exchange off shore. You know like big businesses here in the U.S. use Ireland as a tax haven.

What MR. IRS officer? My wallet isn't located in the U.S., it's based in China, Russia,. etc.

I never thought of that... how easy it really is to move your BTC and LTC to a wallet in China, or any other country that hosts an exchange!

Dogman
7th November 2013, 09:52 AM
Useless that the Fed's or what ever power to try and stop this. All they will be doing what they do best, waste money playing "Whack-A-Mole". And spin their wheels in place, bring one down and another will take its place.

Ares
7th November 2013, 09:53 AM
I never thought of that... how easy it really is to move your BTC and LTC to a wallet in China, or any other country that hosts an exchange!

It truly is a global medium of exchange. It doesn't need a nation to create it, debase it, or use it for political and economic advantages not afforded to average working people. So if it's borderless use it like the globalist corporations and banks do. Find the cheapest place for taxes and "park" your head quarters there. Viola limited tax liability just like the big boys.

Hatha Sunahara
7th November 2013, 10:00 AM
China will develop policies to encourage americans (and everyone else) to keep their BitCoin wallets in their (Chinese) exchange. The US will no longer have an effective way to impose capital controls. The US will also face a declining ability to tax its citizens because Bitcoins are an effective escape hatch from government controls.

I sure hope that Bitcoins put the War on Drugs out of business. The government agencies whose emblems appear in the announcement seizing the old Silk Road are going to have some extreme challenges in maintaining their power over anyone who wants to be free of it.

Where's Palani? He keeps saying to stop using FRNs. Well, here is one way to avoid FRNs entirely.


Hatha