Category Archives: Dark Web

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Dark Web Ditches Bitcoin for Banks, Visa, Western Union

Dark Web Ditches Bitcoin for Banks, Visa, Western Union

Cybersecurity experts are reporting a startling turn in tide in the war for payment method supremacy, with the use of Bitcoin in transacting for dark web services falling to negligible levels. After enjoying years of dominance as the preferred method of payment for illicit products and services, Bitcoin has finally been displaced by the banks, Visa and Western Union.

The end of the affair

As of 31 March 2019, blockchain forensics firm ChainAnalyseThis found that only 0.000001% of all dark web transactions in the past year were carried out with Bitcoin. To be precise, out of 10 million transactions monitored, only 1 transaction was made with Bitcoin, believed to be linked to a Nigerian prince.

More significantly, ChainAnalyseThis chief analyst Nami Kazutsugi said that advancements in banking technology had meant that more traditional payment methods were seeing a surge in popularity with the dark web:

“With the rise of neo banks allowing you to open a bank account and get a virtual debit card within minutes with a phone number, it’s no wonder that we’re seeing more than 50% of [darknet] transactions settled with bank direct cash deposits to disposable accounts.”

Kazutsugi explains that most funds used to pay for services originated from hacked bank accounts or credit cards, and are rechanneled through to other debit cards, new bank accounts or to make digital money transfers via Western Union.

“About 45% of transactions were settled with Western Union. The hacker simply transfers money online, and the receiver picks it up with a code and secret password. It’s all over in 5 minutes,” said Kazutsugi.

First love gone sour

When early darknet market Silk Road first emerged two years after Bitcoin’s creation in 2011, the idea of a digital peer-to-peer currency not under the control of any centralized entity seemed like the perfect solution for a darknet currency. The oft-cited catalyst of Bitcoin adoption boasted tens of thousands of users online, with drug dealers, gun runners, assassins and Pokemon card traders transacting with what they thought was an anonymous means of payment.

But with the actions of global enforcement to shut down Silk Road in 2013, followed by the shutdown of many other darknet markets in the years after, it became clear that Bitcoin’s very design was what had given their users away.

Convicted darknet trader Anthony Soprano recounted how his biggest mistake selling bootleg copies of Microsoft Windows Vista was to accept Bitcoin:

“The blockchain [was] immutable, man. There [was] traceability, you know? Like, if you sold something over Silk Road for Bitcoin, hell, you would eventually need to exchange it back to cash, for dope or for some broad, right? You couldn’t delete your footprints on a public ledger, we shoulda known. It took them [enforcement] to figure it out, but when you think about it, Jesus, we were handing them our palle on a silver platter!”

Opaque, private, centralized – the future of the darknet

With yesterday’s news that darknet marketplace Dream Market had shut down amid speculation that it was the latest victim of law enforcement, it would appear that the era of buying fake drivers licenses for underage stag parties is in its twilight.

Instagram crypto influencer Adoboli Kweku believed it wasn’t over for darknet marketplaces yet, however:

“What the world needs now is something that is not transparent, not public, and not decentralized. Bitcoin’s distributed ledger was a nightmare for anonymity. I advise darknet users to open a bank account in known safe havens like Switzerland, Netherlands, and the US, where they will help cover up your money trail… I think it’s time for the darknet to grow up and do like the bankers and other criminals do.”

North Korean hacker Kim Snakeo-il, who moonlights for the infamous Lazarus Group believed to be behind the hacking of cryptocurrency exchanges worldwide, expressed hope for banks as a darknet solution.

“Personally, the glorious state under the great leadership of he whose birth was heralded by a swallow, caused winter to change to spring, a star to illuminate the sky, and a double rainbow to spontaneously appear, would welcome the exodus from Bitcoin to banks. Those goddamn blockchains are impossible to hack. Every time we come close, hashpower increases from China.”


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Fake Photo Scams Largely Ineffective but Illustrate Need for Cold Storage

Fake Photo Scams Largely Ineffective but Illustrate Need for Cold Storage

With reported instances of the latest ploy for hackers to access user funds, photo scamming is further proof that cryptocurrency cold storage is by far the safest way to keep digital assets secure.

Doctored images are now for sale on dark web forums according to research by Hold Security and warnings from Bank Info Security, and can be purchased for as little as USD 50. A recent example published by the latter showed an anonymous individual holding up a passport and note showing the words “Reset 2FA” along with the date.

Hold Security, LLC is an information security company helping businesses of all sizes to stay secure. Its Chief Information Security Officer, Alex Holden, says that some exchanges’ security is far too lax, not requiring photographic ID at initial registration. He commented:

“Some companies have no ability to assert what their client looks like… It’s not like hackers publish success rates,…But because we know that [hackers who] we are monitoring are actually making money off of it.”

Most larger exchanges have far better security, which makes the success rate of such hacks uncommon, limited to smaller exchanges without rigid security procedures. Most exchanges require new clients to verify their identity with a passport or drivers license before trading on the platform, although with exchanges unwilling to talk about photo scamming events, it could be that even the larger exchanges have seen attempted security breaches through this method.

Hold Security has reported that the dark web is awash with some 10,000 doctored photos which are used as fake verification purposes. The idea is to convince the exchange that a request to reset the often-mandatory two-factor authentication security process required to gain access to accounts is a legitimate one and is coming from the owner of the account. Cryptocurrency exchange giant Binance admitted that they had seen some attempts to breach their security in this way, commenting:

“Unfortunately, we’re no stranger to these types of malicious attempts to gain access… Given the measures we currently have in place, I don’t believe this threat is something for Binance to be particularly worried about at the present time.”


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