One of the caveats attached to running an illegal operation of any kind is that you can’t run to the authorities for help when someone threatens your livelihood. Such appears to be the lesson that Silk Road operators learned the hard way on more than one occasion.
According to evidence presented in the ongoing Silk Road trial by Internal Revenue Service special agent Gary Alford, Silk Road paid out ransoms on at least two different occasions to keep the site up and secure.
In November 2012, an e-mail subpoenaed from alleged mastermind Ross Ulbricht shows that he was contacted in regard to a serious security vulnerability. The anonymous sender demanded $5,000 to keep quite or $15,000 to pass along information on the flaw and how to exploit it.
A financial spreadsheet found on Ulbricht’s computer had an entry in the amount of $15,000 shortly after the e-mail came in with the annotation “pay off hacker.” A separate chat log also suggests the fee was paid.
Another shake-down took place in April 2013 when the site was hit with a DDoS. The site’s ledger shows it paid $10,000 to end the attack although the attacker didn’t let up after being paid off.
The case, being overseen by District Judge Katherine Forrest of the Southern District of New York, offers a fascinating glimpse into the illegal online underground drug market. The FBI shut down the site in October 2013 and arrested alleged ringleader Ross Ulbricht who they believe operated as Dread Pirate Roberts.