36-year-old Blake Benthall is currently dedicated to promoting his newly established company, Fathom(x), which he has been working on for two years.
Source: The New York Times
Translator: BitpushNews Yanan
Blake Benthall, the controversial figure who was once imprisoned for operating the notorious illegal drug trading platform "Silk Road 2.0," has not followed the expected script of his life. In May of this year, at a cryptocurrency conference in Austin, he joined numerous entrepreneurs in showcasing and promoting his startup to investors. However, among this group of people, no one could present their experience of leading a platform involved in drug crimes with millions of dollars in transactions as effectively as he could.
At the exhibition area of the conference, Benthall wore a gray T-shirt with the logo of his startup, looking neat with meticulously trimmed beard. He deftly maneuvered his laptop, wearing a confident smile, and began to narrate his story to a potential investor.
"I am a lifelong entrepreneur," Benthall confidently stated, while presenting his slideshow, detailing how he operated the controversial Silk Road 2.0 website. This was an upgraded version of the Silk Road website, which had attracted 1.7 million anonymous users who purchased illegal drugs such as methamphetamine, heroin, and others using Bitcoin. Benthall candidly recounted his eventual arrest by the Federal Bureau of Investigation (FBI) and the difficult years he spent in federal prison.
Now, having completed his sentence and probation, 36-year-old Benthall is dedicated to promoting his newly established company, Fathom(x). The company focuses on providing software for tracking digital currency transactions to ensure their legality and compliance for businesses and government agencies.
Benthall is well aware that it may seem ironic for someone with a criminal record to teach companies about compliance. However, in an industry filled with fraudsters and overnight experts, he firmly believes that his criminal experience will be a unique asset. He stated that this experience not only helps expose cryptocurrency fraud but also effectively prevents scams like FTX from happening again. FTX was a cryptocurrency exchange that has since closed down, and its founder has been imprisoned.
Although Benthall's business still needs time to validate, his attendance at the Consensus cryptocurrency conference undoubtedly signifies the near completion of his decade-long journey towards cryptocurrency legitimacy. His story is full of astonishing twists and turns: from a childhood influenced by a devout Christian upbringing to operating a website with monthly illegal drug sales of up to $8 million, and then to his path of redemption, which took nearly a decade as he secretly assisted the government in combating illegal activities related to cryptocurrency.
This experience is akin to the evolution of Bitcoin itself: from a speculative digital currency closely associated with dark web crimes to gradually becoming an investment asset recognized by Wall Street. Even the government investigators who were once involved in the Silk Road case and initially skeptical of cryptocurrency have now become fervent cryptocurrency advocates. Among them, former FBI investigator Vincent D'Agostino has even invested in Benthall's startup, undoubtedly the best endorsement of Benthall's personal transformation.
Looking back to the second year after Benthall's arrest, Consensus was just a small industry conference with 500 technical professionals discussing Bitcoin and blockchain. Today, it has evolved into a grand exhibition with over 15,000 attendees and showcases of dozens of digital currencies and startups. In this feast, venture capitalists are everywhere, seeking lucrative returns and endless possibilities in this rapidly developing industry.
As Benthall concluded his presentation and gently closed his laptop, an investor immediately decided to invest $150,000 in his company.
From a Well-behaved Boy Teaching at Home to a Drug Lord on the Internet
Looking back at Benthall's growth trajectory, as the only child in his family, he grew up in Houston. His parents, devout Christians, chose to homeschool him. His mother, Sharon Benthall, a respected teacher at a community college, described her child as "reserved, cautious, and very smart." His father, Larry, a senior software manager, early on guided young Blake to explore the vast world of desktop computers, which quietly became the bridge connecting Blake to the outside world.
At the age of 7, Blake's creativity had already emerged, as he meticulously created a dedicated website for his toy baby. By the age of 14, this young man, together with a peer he met on AOL Instant Messenger, co-founded a web hosting company for online games. With the courage of a young calf, he used his mother's PayPal account to order a computer server and had it delivered directly to their doorstep. He promised his mother that he would repay the expense with the subscription fees from his company's clients.
"In hindsight, the signs at that time actually revealed some clues," Sharon Benthall recalled.
Blake's parents recalled that they had tried their best to guide their child to use the internet reasonably, but the young Blake was already deeply immersed in this virtual world. On the internet, he found friendships and excitement that were hard to come by in church and the Boy Scouts.
After briefly attending a small Christian school, Florida College, near Tampa, in 2009, Blake, with a persistent pursuit of his technological dreams, decisively moved to San Francisco. He found a job at a startup, dedicated to developing an app for parents to manage their children's game time. However, this app quietly exited the market after only four months.
Subsequently, Blake shuttled between the Bay Area and Florida, frequently changing jobs. Outside of work, he spent most of his leisure time in the online world. Among all, one field that particularly attracted him was Bitcoin. This digital currency, priced at around $130 at the time, allowed people to conduct online transactions anonymously. In 2013, he accidentally read an interview featuring a mysterious figure who called himself "Dread Pirate Roberts," who operated a website called "Silk Road." This website was a dark web marketplace mainly used for selling illegal drugs, relying on Bitcoin and Tor (software that anonymizes network identities, providing strict privacy protection for both buyers and sellers) for transactions, seemingly beyond the reach of the government.
Blake developed a strong interest in the concept of Tor and hoped that his activities on the internet would not be associated with his computer. So, he promptly downloaded Tor.
One afternoon in October 2013, while working out at Equinox gym in downtown San Francisco, Blake was shocked to see explosive news on the TV screen above him: law enforcement had successfully shut down the "Silk Road" website and arrested the mysterious operator behind it, "Dread Pirate Roberts" — whose real identity was Ross Ulbricht.
This 29-year-old Ulbricht, from Texas, also lived in San Francisco. What was even more shocking was that he was arrested around Blake's home in the missionary district.
Although Blake had never used drugs or been involved in the "Silk Road," when he learned from the news that authorities had seized up to 26,000 bitcoins, a strong impulse surged within him. He hastily finished his workout, rushed home, and immersed himself in the world of dark web gossip.
Despite the FBI successfully taking down the "Silk Road," the website's forums remained active. Some users were panicked by the arrests, while others began discussing how to establish new drug markets to fill the void. Knowing that these chat contents could be deleted at any time, Blake acted quickly and used a program to save every post on the forum, as if recording a disappearing history.
Blake Benthall's new venture quietly sprouted in such a background. A moderator of "Silk Road" discovered someone was copying forum data and curiously investigated the identity. When Benthall revealed his actions through anonymous chat software, the moderator posed a series of technical questions and eventually offered him 50,000 bitcoins to build a new website.
Establishing an illegal drug trading website under the close surveillance of the government was obviously a risky and unwise choice. However, at the time, Benthall was facing financial difficulties, and his job interview at SpaceX did not go as planned. He reassured himself that it was just a temporary programming job, and the risk seemed manageable.
"At the age of 25, I knew nothing about conspiracy crimes," he recalled. "I thought I could be an anonymous behind-the-scenes developer, feeling that the risk was manageable."
He did not consider the crimes that developing the website might trigger, nor did he consider the harm of freely using drugs. He firmly believed in the libertarian views of "Dread Pirate Roberts": Silk Road allowed users to rate, reducing the risk of drug transactions. With this belief, he embarked on this unknown and risky path.
He poured his heart into meticulously creating the later "Silk Road 2.0" over three weeks, and the website quietly went online just one month after Ulbricht's arrest.
Benthall originally intended to withdraw from the situation, but the moderator who hired him made an enticing offer: as long as he continued to manage the website's servers, he could receive half of the profits.
"I certainly knew it was illegal," Benthall candidly stated. "But the first day the website went live, it received 100,000 registered users. It felt great to finally feel that something I created was being used by people."
At this time, he received an offer from SpaceX and became a flight software engineer for the company. Despite the modest salary and the need to commute weekly from the Bay Area to the company's headquarters in Southern California, he accepted without hesitation. Because it was the "dream job" he had always longed for. Thus, he began the life of a slashie.
Double Life
Silk Road 2.0 quickly expanded, but Benthall's partner (later arrested and confirmed to be a 19-year-old living in the UK) wanted to exit. Benthall had to choose between shutting down the market and running it alone.
"I became the sole boss," Benthall recalled. "Suddenly, overnight, I became the person in charge of the world's largest drug sales website."
This job kept him awake at night, and his daytime work made it difficult for him to concentrate. Once, he even crawled into the "Dragon" space capsule model at SpaceX to take a nap.
Nightfall was the time for his wealth accumulation. Silk Road 2.0 extracted about 8% commission from each transaction, bringing him monthly income of up to $500,000. A portion of this substantial wealth was used to pay for customer service support provided by several anonymous users.
In January 2014, he splurged $127,000 to purchase a Tesla Model S with bitcoins, indulging in the luxurious life brought by wealth. He flew by turboprop plane to Lake Tahoe, attended the Coachella music festival, and even shared magnificent views from a boat on Instagram, flaunting his extraordinary life.
However, he always maintained a sense of vigilance and never brought the notebook recording his dark web activities into SpaceX, fearing that the company's security personnel would uncover his secrets. One day in February of this year, while he was busy at SpaceX, Silk Road 2.0 was hacked, and approximately $2.7 million worth of bitcoins were stolen. In the company's cafeteria, he overheard a colleague mocking the hacker attack: "Can you believe the idiot who restarted this stupid website?"
Shortly after, SpaceX dismissed Benthall due to poor performance, and he wholeheartedly devoted himself to his illegal business. The website publicly declared that he would not profit from it until customers received full payment.
As user stickiness deepened, Benthall's trust in his anonymous customer service team also grew. Despite facing hacker attacks, heavy work pressure, and fear of legal sanctions, he still felt responsible for maintaining the website's operation and could not easily let go.
However, he did not anticipate that the hammer of legal sanctions was closer than he had expected.
Crisis Strikes
Among the anonymous customer service personnel hired by Benthall was an undercover Homeland Security investigator, Jared Der-Yeghiayan. Der-Yeghiayan had previously participated in the investigation of the original Silk Road website, posing as a helpful community administrator to gain Ulbricht's trust. Now, he was using the same tactics.
Der-Yeghiayan only knew Benthall by the alias Defcon and was impressed by Defcon's technical abilities.
The investigator spent several months delving into Silk Road 2.0, but the real breakthrough came from researchers at Carnegie Mellon University. They found a method to reveal the location of dark web servers hidden by Tor. Federal authorities used their research findings to link Benthall's name to the servers hosting Silk Road 2.0.
Investigators found that Benthall's previous job was at SpaceX in a Google search and initially thought someone had stolen his identity. Gary Alford, the IRS investigator in charge of the case, joked, "There's a rocket scientist" running this website.
They monitored Benthall for five months to gather more evidence. Then, one afternoon in November 2014, when Benthall drove his Tesla away from home, three cars surrounded him. Federal agents appeared and arrested him.
Der-Yeghiayan and FBI investigator Vincent D'Agostino from New York, both of whom had been involved in the Silk Road case, brought Benthall back to his home, handcuffed him to the bed, and began searching.
During the months of surveillance, D'Agostino felt that he had gained a fairly deep understanding of Benthall. He had read his forum posts, seen his tweets, and even watched his performances in a college band on YouTube. D'Agostino had handled multiple organized crime cases and did not believe Benthall was a habitual offender.
Investigators also believed that Benthall was different from Ulbricht. Ulbricht was a radical libertarian who distrusted government authority, was accused of hiring hitmen to kill five people he believed would expose his actions (although none of them died), and was ultimately sentenced to life imprisonment for drug trafficking (Republican presidential candidate Donald Trump recently stated that he would pardon him if elected).
In contrast, Benthall did not seem like a dangerous individual. D'Agostino said that his main interest seemed to be "making the website better."
"When developers want to make a career, they sometimes overlook the broader social context," D'Agostino said. "The pure joy of developing a website is their excitement." He believed that these skills could be useful to the government.
In Benthall's apartment, D'Agostino and Der-Yeghiayan told him that they knew he was Defcon and showed him chat records he thought had been deleted long ago. They also informed Benthall that they had searched his parents' home in Houston and urged him to cooperate.
Benthall realized he was in big trouble. He recalled, "I needed to make them believe I'm not a monster." After a moment of prayer, he agreed to hand over the digital keys to the website and the bitcoin wallet. After midnight, he squeezed into the bedroom with the investigators and explained the operation of Silk Road 2.0 to them. Although Benthall could not provide the names of users and the operating team, he created a tool to extract the data the investigators needed from the website.
Der-Yeghiayan said, "He immediately showed remorse, and I felt he was sincere."
Cooperating with the Federal Government
After federal prosecutor Katie Haun refused his bail request, Benthall spent the first few nights of his arrest in Oakland prison. At the hearing, the judge announced that he would face at least ten years of imprisonment. He was then transferred to the detention center in Queens, New York, awaiting prosecution.
Several weeks later, D'Agostino took Benthall out of the detention center and brought him to the FBI office near Chinatown - a windowless interrogation room. Benthall was handcuffed to the desk, and a laptop was placed in front of him as the agents requested his technical assistance. Benthall typed on the keyboard with one hand, responding to their requests one by one.
"This was the most stressful hacking marathon of my life," Benthall recalled, realizing it was a rare opportunity.
The government's raid on Silk Road 2.0 marked the first crackdown on dozens of dark web markets. According to D'Agostino, the FBI was "flooded with data" and urgently needed people with technical skills to analyze the data.
With approval from federal prosecutors, investigators began discussing cooperation with Benthall's lawyer, Jean-Jacques Cabou. If Benthall was willing to assist the government, the judge might be lenient in the future. "In most cases, the government can't hire talent like this," Der-Yeghiayan said.
The discussions progressed, and soon Benthall was left alone to work in a locked FBI interrogation room. Although the handcuffs were removed, he still needed an escort to use the restroom.
One day, D'Agostino handed him a polo shirt, indicating he should change out of the blue prison uniform. They then drove to a shopping center in Queens and sat in the food court, each operating their laptops. D'Agostino even handed the prisoner a $5 bill, allowing him to move freely in the food court. FBI agents watched Benthall like "kids," and when he bought a cup of coffee, the agents even asked him for change.
"Your goal is to slowly and gradually build a relationship with this person so that we can trust him more and get more information," D'Agostino explained.
In July 2015, Benthall admitted to four charges, including drug trafficking and money laundering, and signed a cooperation agreement, formally committing to work for the government. After eight months in prison, he was allowed to move to an apartment in Queens, becoming a full-time cybercrime consultant, wearing an ankle monitor, and receiving a stipend as compensation, including a slice of pizza, toothpaste, and subway fare for basic living expenses.
Benthall assisted in investigating large-scale corporate hacking incidents, tracking bitcoin transactions to try to identify criminals, and even received training at the FBI office in Quantico, Virginia. "The U.S. government holds a large amount of cryptocurrency, and how to ensure its security is indeed a worrying issue," he said.
Benthall considered himself lucky because he happened to possess the skills the government needed at the time. However, Brian Farrell, who served six years under the identity of DoctorClu, one of the anonymous moderators Benthall had hired, believed it was unfair that he, as a "minor player in website operations," received a heavier sentence.
Benthall usually refused to discuss the specific details of his government work. In the past, he only mentioned one case: someone threatened to receive a bitcoin ransom or else would bomb a school in New York City. He assisted in identifying the person by tracking their encrypted wallet address. (The FBI declined to comment, with a spokesperson stating, "There are no public documents detailing Benthall's actions.")
This semi-free status made him paranoid. "Once you're under the surveillance of the state machine, the way you view the world will change completely," he said. He always felt he was being watched and feared being recognized by angry Silk Road 2.0 customers. He also participated in a government-funded psychological therapy program.
Despite this, he gradually resumed a normal life. He sang and played the guitar at outdoor karaoke events, re-engaged in church activities, and made new friends. But he remained silent about his past, and people only knew his middle name was Emerson.
A New Beginning?
Over the next five years, Benthall worked alongside some of the investigators who had previously participated in the crackdown on Silk Road and Silk Road 2.0. However, as time passed, these government employees left their positions and turned to the private sector for new opportunities. Especially as bitcoin gradually became mainstream and surpassed the $10,000 mark, they flocked to the crypto industry.
One of the most notable transitions was federal prosecutor Haun, who initially opposed Benthall's bail. In 2018, she joined the venture capital firm Andreessen Horowitz, focusing on investing in crypto companies, and successfully raised a $1.5 billion fund just four years later.
D'Agostino's experience was also representative. Initially skeptical of bitcoin, he gradually changed his mind over time, believing it would "change the world." He installed bitcoin mining software at home and eventually decided to leave the FBI to join a private security company, focusing on combating ransomware attacks. Der-Yeghiayan chose to join the blockchain analysis company Chainalysis.
As the investigators around him left one after another, Benthall began to contemplate his future. Although he was essentially on probation, had not been sentenced, and had no clear release date, he had a criminal record.
Columbia Law School professor and former prosecutor Daniel Richman stated that while the disposition for Benthall was not common, it could happen in specific circumstances, such as when someone's "culpability is enough to be prosecuted but does not pose a substantive risk during bail."
"This sounds like indentured servitude," Richman added, "However, in the end, this arrangement could be beneficial to both parties."
The COVID-19 pandemic provided a potential opportunity for Benthall to be released. In early 2020, as people stopped going to the office, Benthall applied to the judge to allow him to live and work at his parents' home in Houston.
The following spring, Benthall believed the time had come and requested a formal sentencing from the court. In March 2021, he flew to Manhattan with his parents to attend the hearing.
Wearing a suit and a pair of uncomfortable leather shoes, Benthall finally received the sentence he had hoped for: three years of probation - during which he would continue to work for the government as needed. This decision was not made public, and Benthall remained tight-lipped about it to avoid jeopardizing the hard-won situation.
Despite this, the existence of a criminal record made his job search exceptionally difficult. He also needed to repay his parents' retirement savings used to pay legal fees, increasing the pressure on his life. And during his cooperation with the government, he became a father.
After three consecutive job offers were withdrawn, Benthall decided to take a chance in the spring of 2022 and founded Fathom(x). He admitted that this fulfilled his lifelong dream of "starting a legitimate business."
The concept of Fathom(x) is simple and clear: to verify whether a company truly owns the cryptocurrency it claims and ensure its legitimacy. Benthall believed that his years of government work experience undoubtedly enhanced his credibility. What's more, he successfully convinced D'Agostino, who had once arrested him, to become an investor in Fathom(x). "I made the investigator who once arrested me believe in me," Benthall proudly said.
Since D'Agostino left the FBI, the two had remained in contact. When Benthall still lived in New York, D'Agostino invited him to backyard barbecue parties and even sang karaoke together.
When starting this startup, Benthall called D'Agostino for advice. The former FBI agent expressed willingness to invest. "He is completely different from the person I arrested ten years ago," D'Agostino said.
Former prosecutor and law professor Richman expressed unease about this investment. "I don't like the idea that when you work with someone as an investigator, that person becomes your business partner - even if there's a slight possibility," he said.
D'Agostino was not the only former "colleague" Benthall encountered in his new life. He pitched his software to government agencies, including the IRS, and Alford - the Silk Road investigator - still worked at the IRS.
"Life is full of wonders and surprises," Alford exclaimed in a recollection, his thoughts drifting back to that video conference where Benthall was demonstrating to him and other IRS agents. Although there is no explicit prohibition for felons to work for the federal government, government ethics expert John Pelissero from Santa Clara University expressed surprise that Benthall was not listed on the "do not hire" list when he was sentenced. As for whether the IRS is using Fathom(x) services, Alford chose to remain tight-lipped.
Benthall remained tight-lipped about the amount of funding his company raised from investors. Despite Fathom(x) being small in scale, with only two contract workers, he insisted that the company had already turned a profit.
At the same time, he began to deeply reflect on the potential harm that the website he once operated, selling dangerous goods, could have caused to society. During his time in New York, the passing of a new friend deeply moved him - the friend had lost his life due to a drug overdose. This made him even more convinced that considering the large user base of Silk Road, there were certainly people who had suffered unfortunate consequences from purchasing drugs on the website.
As he embarked on the journey to a cryptocurrency conference, Benthall habitually used his middle name when ordering at a coffee shop. Perhaps it was out of habit, or maybe because he was still exploring how to confront his past openly. He imagined that once he started using his full name, there might be victims who would come to confront him face to face.
"I completely understand their feelings and respect their rights," he candidly said, "So I am mentally prepared for the difficult conversations that may come next."
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