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After the government infiltrated (presumably an exit node) of the Tor network, is it still as safe for users who want their anonymity hidden as it was before the government cracked it? Or is there a risk that the government has found a loop-hole and are on the inside?

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Not a tor exploit, or hijacked exit node. The tor project has a long post about this:

https://blog.torproject.org/blog/tor-and-silk-road-takedown

In this case we've been watching carefully to try to learn if there are any flaws with Tor that we need to correct. So far, nothing about this case makes us think that there are new ways to compromise Tor (the software or the network).

And news sources say:

One clue mentioned in the criminal complaint against Ulbricht was a package seized from the mail by U.S. Customs and Border Patrol as it crossed the Canadian border, containing nine seemingly counterfeit identification documents, each of which used a different name but featured Ulbricht’s photograph. The address on the package was on 15th street in San Francisco, where police found Ulbricht and matched his face to the one on the fake IDs.

The complaint also mentions security mistakes, including an IP address for a VPN server used by Ulbricht listed in the code on the Silk Road, mentions of time in the Dread Pirate Roberts’ posts on the site that identified his time zone, and postings on the Bitcoin Talk forum under the handle “altoid,” which was tied to Ulbricht’s Gmail address.

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