Blockchain sponsors illicit marketplaces
Sara Mosqueda 23. Sara has been an Associate Editor at ASIS International since January 2019 joining the Security Management team. She holds a Bachelor of Arts in Biology from The George Washington University. “Follow the Money: How Digital Currency is Changing Crime,” ASIS International. 8/12/23. https://www.asisonline.org/security-management-magazine/articles/2023/08/cryptocurrency/How-digital-currency-changes-crime/
One modern form of currency is a digital asset, or cryptocurrency. Cryptocurrencies are usually not issued by a central public or private authority; instead, these digital currencies were independently created to pay for services or goods. Myriad ones exist, such as Bitcoin, XRP, Ethereum (ETH), and Dogecoin, and many depend on blockchain technology.
Cryptocurrency users found a preferred advantage in digital assets: they were no longer relying on a centralized financial institution to support transactions. So, if a financial crisis occurs, some have argued that the funds invested in digital assets will retain their value.
Criminals seeking to keep their profits out of regulated institutions have also found advantages to digital currency.
“U.S. law enforcement agencies have detected an increase in the use of virtual assets to pay for online drugs or to launder the proceeds of drug trafficking, fraud, and cybercrime, including ransomware attacks,” according to the 2022 National Money Laundering Risk Assessment by the U.S. Department of the Treasury.
“It’s an alternative way to pay for traditional acts of crime,” says Celina Realuyo, lecturer at The George Washington University and expert in counterterrorism and threat finance issues in the Americas.
Cryptocurrency Crimes
Digital currency plays a role in many crime trends and illicit activities today, and its use cases just keep growing.
Illicit marketplaces. Although it was not the first such site, The Silk Road was relatively popular and supported by more than 100,000 buyers before being taken down in 2013 by the FBI.
The Silk Road was an online black market website that allowed anonymous users to buy and sell products and services using digital currency. Since its shutdown, other Dark Web markets have emerged—some of them rebranding as later versions of The Silk Road. Law enforcement agencies worldwide have tried to target these marketplaces, as they often connect disparate crime rings and schemes.
Recently, a coordinated effort between Europol, Australia, and the United States seized an illegal Dark Web marketplace called Monopoly Market. As part of the seizure, dubbed Operation SpecTor and publicly disclosed on 2 May 2023, law enforcement agencies arrested 288 suspects involved in buying or selling drugs and confiscated more than €50.8 million ($53.4 million) in cash and virtual currencies, 850 kg of drugs, and 117 firearms.
Many illegal domains are supported by cryptocurrencies, according to the International Monetary Fund (IMF).
“Recreational and pharmaceutical drugs are the most popular products, followed by stolen and counterfeit documents such as identities, credit cards, and bank credentials. Some sites offer hacking and technological crime services, including malware, distributed denial of service attacks, and hacking for hire,” the IMF said in a 2019 article.
One reason cryptocurrencies are relied upon by these websites’ users is because they provide at least some screening of the user’s identities, partially hiding them from law enforcement.
U.S. law enforcement agencies have detected an increase in the use of virtual assets to pay for online drugs or to launder the proceeds of drug trafficking, fraud, and cybercrime, including ransomware attacks.