Darkmarket – The secret illicit Internet Marketplace
On January 12, 2021, Europol through a Press Release confirmed that it had taken down DarkMarket, the world’s largest illicit marketplace built on a fully peer-to-peer system. The international operation involved collective efforts from governments of Germany, Australia, Denmark, Moldova, Ukraine, the United Kingdom (the National Crime Agency), and the USA (DEA, FBI, and IRS). Europol coordinated the cross-border collaborative effort of the countries involved and through its specialist, operational analysis led the effort. Darkmarket was by far the largest illicit marketplace with more than 500,000 users and more than 320,000 transactions conducted on the platform
Headquartered in Hague, the Netherlands, Europol supports the 27 EU member states in their fight against terrorism. It leads the initiative and has a dedicated European Cybercrime Centre (EC3) which facilitated international information exchange and provided Germany’s Central Criminal Investigation Department with advanced analytics to track down the alleged perpetrator near the German-Danish border. The Australian national who has been identified as Julian K, was then investigated by the cybercrime unit of the Koblenz Public Prosecutor's Office. According to the press release, the information obtained about the perpetrator allowed the investigators to locate and shut down the marketplace from the web and seize the criminal infrastructure. The German police relied on the information obtained by Europol and the “follow the money” method to reveal the whereabouts of Julian K who used a pseudonym identity in the platform. More than 20 servers in Moldova and Ukraine supported by the German Federal Criminal Police office (BKA) will now be utilized by the investigators to track down the moderators, sellers, and buyers who were involved in the illegal trades.
Dark market which was hosted in May 2019 has been used by the malevolent actors to sell on its platform fake national IDs, illegal drugs, arms and ammunition, Trojans, malware, stolen personal data of natural persons and organizing human trafficking. Darkmarket was the eBay of the dark Web, and was accessible through privacy browser such as Tor, that masks the IP addresses of its users and safeguards their real identities. It has been alleged that about € 140 Mn worth of cryptocurrency was exchanged in Darkmarket by its users since May 2019. It is also believed that the Europol and German police also found trace of Darkmarket on Cyberbunkers (another darkweb organization which was taken down by the German police and the FBI) servers.
The modus operandi or facilitation of payments of such Dark markets is not in fiat currency or online payment gateways for two obvious reasons, Firstly, it leaves a digital footprint and secondly, it reveals the identity of the counterparty. The preferred mode of payment is in Bitcoin, Ethereum, and Ripple or privacy coins like Monero, dash, Zcash.
The road ahead suggests that the regulators, Blockchain investigators and the public at large need to be aware of the technology and stay aware at all times and do not play with law in order to make small profits. A stricter KYC & KYT requirement is imposed upon the DeFi exchanges. Taaki and Swanson, who coded the Darkmarket, have relied on the anonymity provided by the Blockchain technology to build the platform. The above area chart provided by Chainalysis shows the darkmarkets available on the internet with their overall market cap c. 2020. There has been White House, Empire, Silkroad, Cyberbunkers in the past and Hydra the Russian darkweb marketplace which have a whopping 624% YoY growth rate and made north of USD 1.3 Bn at end of 2020. Hydra still stays by far the largest dark net market making 75% of dark net revenue worldwide alone. A report from Flare system predicts that White House could soon replace Darkmarket with a growing user base and over 29,000 listings which is twice its nearest competitor Dark0de. The specialty with White House is that it only accepts Monero in its platform, a fully privacy coin although its platform is not very user-friendly. The research paper by Alberto Bracci and M. Nadini conducted a research on how the darkweb is being utilized to sell Pfizer, Sputnik, and BioNTech vaccine dials at USD 15,000 and its growing user base. Angerer who was the persecutor and whose efforts led to closure of CyberBunker and Darkmarket spoke to NewYorker.com and asserts that every time they took down one darkmarket another would take its place due to the illicit desires of the people.
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