FBI shuts down online black market

U.S. law enforcement authorities have shut down Silk Road, an alleged online bazaar for illegal drugs and criminal activities, and arrested its suspected owner, the Federal Bureau of Investigation said on Wednesday.

Federal prosecutors in New York charged Ross William Ulbricht, 29, better known as Dread Pirate Roberts, with narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, according to court filings.

The court papers said the site had nearly 13,000 listings with categories like "Psychedelics" and "Stimulants."

It also offered other goods like fake IDs and services for computer hackers. The papers said undercover investigators in New York bought cocaine, heroin, LSD and other drugs from the site.

"Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," FBI agent Christopher Tarbell said in the criminal complaint.

According to Tarbell, the site was used by "several thousand drug dealers" to sell "hundreds of kilograms of illegal drugs."

The site, which had operated since early 2011, also offered contact lists for black market connections, counterfeiters and hit men as well as tutorials on hacking ATMs, according to the charges.

Authorities seized $3.6 million worth of bitcoins, a virtual currency which was used instead of cash or credit cards to complete transactions on Silk Road.

Bitcoins function on the Internet like regular currency, except the identities of the sellers and buyers are not known to each other. A single bitcoin is currently worth about $126.

The charges against Ulbricht said his website generated sales of more than 9.5 million bitcoins, roughly equivalent to $1.2 billion.The raid on Wednesday was not the first time the U.S. government has made arrests related to Silk Road.

Earlier this year, authorities in South Carolina arrested Eric Daniel Hughes, who used Silk Road under the name Casey Jones, and charged him in state court with drug possession.

The Drug Enforcement Agency seized bitcoins in that case as well, in which Hughes allegedly purchased drugs from the online market.

Bitcoins, which have been around since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking the digital currency to Silk Road.

Al Jazeera and wire services