Its been hinted that they'll be busting other Tor marketplaces in the next day or so. I wonder if they were similarly infiltrated and what effect that will have on the community.
Seriously, if you were running a Tor marketplace and one of your competitors goes down, it is a perfect cover for running away with everyone's bitcoins and disappearing.
Tbh tho, I wouldn't be surprised if you setup an Iranian site that you weren't accused of "funding terrorist operations" and the trial gets replaced with a US drone strike.
Point taken, though.
As in, you live somewhere else out of reach of the Iranian and US justice systems. But you host the site in Iran.
The point is where isn't important. Given a large enough market, the US would do whatever was needed to catch you. :P
So it's unlikely to be a false flag.