The FBI announced today that a startup founder and former SpaceX employee was arrested in San Francisco for allegedly operating Silk Road 2.0. According to the FBI, Blake Benthall's online drug bazaar was netting millions of dollars worth of bitcoin every month while he simultaneously worked at SpaceX.
Elon Musk's space exploration startup told Business Insider that Benthall was a SpaceX employee while he began operating Silk Road 2.0. KQED News reports that Benthall is facing a lengthy prison term for his alleged involvement in the dark web drug trafficking operation:
Blake Benthall, who resides on Florida Street, was arrested Wednesday, the FBI said. U.S. In New York, U.S. Attorney Preet Bharara said Benthall is being charged with conspiring to commit narcotics trafficking by starting the "Silk Road 2.0″ website about five weeks after the government shut down the original version last year. He has also been charged with conspiring to commit computer hacking, conspiring to traffic in fraudulent identification documents, and engaging in a money laundering conspiracy. The various charges carry sentences from 10 years in prison to life.
The criminal complaint, which was unsealed today, says the online market was generating sales around $8 million per month.
Benthall didn't make FBI work very hard. According to the complaint, Benthall allegedly registered the server he hosted Silk Road 2.0 on with his own email address.
Benthall also retweeted a post about the relaunch of Silk Road on the very day it went online:
Benthall has had a long history working for startups and has an extensive background with Python, Ruby, and jQuery. On Facebook, Benthall identifies himself as a software engineer for SpaceX. A SpaceX spokesperson tells Valleywag Benthall parted ways with the company this past February.
Prior to SpaceX, Benthall worked with Carbon Five, a top-level startup consultancy that has worked with Square, Taskrabbit, and Walt Disney. A Carbon Five spokesperson tells Valleywag that Benthall had left the company before he began running Silk Road 2.0:
Blake is not currently an employee of Carbon Five. He was a contract employee with Carbon Five from December 2012 - March 2013. According to the dates that have been reported in the news, his employment with us does not overlap with the time that the Silk Road 2.0 web site was operational.
Carbon Five had nothing to do with Silk Road or anything that Blake allegedly worked on outside of Carbon Five projects.
Forbes's Ryan Mac also reports Benthall was actively running a tech incubator out of his apartment.
Benthall ran a tech incubator out of his home in SF's Mission district. A neighbor says home's backyard was filled with FBI agents yesterday
— Ryan Mac (@RMac18) November 6, 2014
Benthall allegedly used the profits from his short-lived startup drug life to live large. According to the complaint, he used $70,000 worth of his bitcoin to buy a Tesla.
His alleged involvement in Silk Road 2.0 operation seems like a sharp departure from who Benthall was three short years ago. On Reddit, Benthall was downvoted for telling the site's users "You don't need drugs":
Maybe he should have listened to his own advice?
This is a breaking news post and we will update as we learn more.