A university dropout who was the “guiding mind” behind an online black market for illegal drugs has been jailed for five years and four months.

Thomas White was sentenced at Liverpool crown court on Friday for running the Silk Road 2.0 site on the dark web, and for possessing hundreds of indecent images of children found on an encrypted laptop after his arrest.

White, 24, set up the site after the FBI shut down the original Silk Road in 2013. Sentencing him, the judge, Thomas Teague QC, said: “You traded in illicit drugs and facilitated the trading by others in such drugs through the medium of a clandestine online marketplace, Silk Road. It had sophisticated security arrangements to minimise the risk of detection by law enforcement agencies and users made and received payments in Bitcoin.”

David Jackson, prosecuting, said White, using the name StExo, began using the dark web marketplace in 2013 to buy a prescription drug used for sleeping disorders, and then entered into an agreement with the user MedsforBitcoin, based in India, to become a distributor in exchange for a discount.

Jackson said the agreement was a “stepping stone”: White upgraded from a buyer’s to a vendor’s account and sold items including drug-testing kits and MDMA. He went on to become involved in advising on security and creating backups of vendor pages and forums in case the site was taken down.

In October 2013 the FBI had shut down the site and arrested Ross Ulbricht, who used the name Dread Pirate Roberts, for running it. White collaborated with an American user, Blake Benthall, known as DefCon, to set up a new marketplace, Silk Road 2.0.

Jackson said: “The crown say this defendant was the guiding mind behind the site whereas Benthall provided the technical knowhow.”

White took up the mantle of Dread Pirate Roberts but once the site was up and running again he began to reduce his active involvement. Silk Road 2.0 continued to operate until November 2014 but the court heard the defendant, of the Bulrushes, Liverpool, had announced his retirement in messages in January 2014, when he was 19.

Teague said: “From the beginning of 2014 you reduced your personal involvement in running Silk Road, no doubt in the hope of avoiding Ross Ulbricht’s fate. However, the authorities caught up with you.”

White pleaded guilty last month to supplying MDMA, money laundering and making indecent images of children. He also admitted assisting or inducing the commission of offences abroad.

Jackson said the charge reflected sales of class A drugs in Germany worth £110,000, for which White earned 1% commission.

When police raided the £1,700-a-month flat he rented in Mann Island, Liverpool, in November 2014 they seized electronic devices. As well as finding material related to the site, they found 464 indecent images of children, including some as young as six months.

The National Crime Agency (NCA) detectives Garry Tancock and Paul Chowles, who led the investigation into White, said that among a vast amount of encrypted data found on White’s seized computers, some had been hacked from Nasa, the FBI and the extramarital affairs website Ashley Madison. It is not believed that White himself hacked the data.

Nicholas Johnson QC, defending, said: “What we are dealing with is a young man, aged 19, sitting in his student accommodation in Liverpool, who has a degree of sophistication so far as the internet was concerned, and thereby helped to facilitate the setting up of a marketplace which others then joined up to and carried out their own drug trafficking. He is, we would submit, significantly removed from what was actually going on.”

The court heard White had worked as an engineer since his arrest and had tried to make a “positive contribution” to society. References from his mother and partner were received by the court.

The NCA said White, who left after one term of an accounting degree at Liverpool John Moores University, was believed to own 50 Bitcoins, with a current value of about £192,000. Detectives said the self-taught computer expert was controlling, manipulative and forthright online, but the opposite in the real world. Teague ordered he be subject to notification requirements for convicted sex offenders for 10 years.