By CCN: It appears safety standards for criminals on the dark web are shrinking quickly. Following a series of raids in both Germany and the United States, American and European officials have succeeded in taking down what they call one of the world’s “largest online criminal trafficking operations.” The problem is it took authorities two years to take down the bad guys, paving the way for millions in crypto funds to be stolen in the interim.
Three German citizens – who remain unnamed at press time – have been charged in both their home country and the United States with operating what’s known as the “Wall Street Market,” a dark net platform that allegedly hosted approximately 5,400 sellers of illegal drugs including cocaine and heroin. The men are also being charged with forging illegal documents for users, such as driver’s licenses and identity papers.
Ryan White, a prosecutor with the U.S. Attorney’s Office in Los Angeles, told MSN:
“The charges filed in Germany and the United States will significantly disrupt the illegal sale of drugs on the darknet. We believe that the Wall Street Market recently became the world’s largest darknet marketplace for contraband including narcotics, hacking tools, illegal services and stolen financial data.”
Nearly all the transactions occurred with cryptocurrencies, primarily bitcoin and monero, a digital asset known for its quasi-anonymous properties. Both bitcoin and monero wallets were seized by the FBI and other legal officials during the raids.
Frankfort prosecutor Georg Ungefuk says that crypto-based transactions can be very difficult to trace, which is what allowed the market to thrive for so long. Overall, roughly two years were spent investigating the market and its operators before any serious action was taken.
The criminals made millions in profit thanks to these cryptocurrencies, taking anywhere between 2%-6% for every finalized sale.
A weighing fear amongst regulators is how common cryptocurrencies are allegedly used for dark web transactions. Bitcoin and other digital assets have indeed been used to purchase contraband on illegal websites. Ungefuk’s words regarding the potential difficulties of tracing bitcoin and other crypto transactions, however, suggest that regulators’ capabilities still leave a lot to be desired.
Bitcoin was once a commonly used cryptocurrency for dark web purchases. This case is no exception. The idea that it required two years for lawmakers to crack down on the activity, however, opens the floor to a lot of questions. For example, why did it take so long to make a move when bitcoin has proven to be one of the crypto industry’s more traceable assets?
Bitcoin is not anonymous, and every transaction is allegedly recorded via blockchain technology. This is something that has ultimately led many dark web users and cybercriminals to step away from bitcoin, and the currency no longer boasts the high usage it once did in illegal marketplaces.
Bitcoin may have initially promised its users anonymous transactions in the past, but its blockchain is publicly available, which means that information regarding transactions is there for anyone to see. Sarah Meiklejohn – a cryptography expert at University College London – is cited in reports as saying:
“It’s pretty well-established at this point that bitcoin is not anonymous, and it is traceable. If you are buying drugs, using bitcoin is not the best bet.”
So why two years? Either the officials were simply taking their time in putting a case together or perhaps regulators are still not as savvy as they claim to be when it comes to the blockchain.
Last modified: May 20, 2020 12:20 PM UTC