Illegal Activities Associated with Cryptocurrency & the Dark Web Turning into a Multi-Billion Industry

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Black glove reaching through a laptop for Bitcoins.
Illegal activities carried out with digital currencies are continually on the rise, now expected to hit the $1.5 billion mark before year’s end.

Truth be told, if the darknet markets were legal, then perhaps we would have one or more of the owners of these markets emerging as one of the wealthiest people on the globe.

The reason is that the nature of activities that happen within the confines of the dark web has attracted not only hundreds of thousands of sellers and buyers, but also hundreds of markets.

In the end, an underground industry that uses virtual currencies to transact payments has sprouted, giving rise to an illegal sector which seems to be growing at a rate that seemed beyond imagination, and in the end, contributing more toward the growth of digital currencies.

What’s more is that as time goes by, more individuals with better innovation tactics join the arena to offer what has never been witnessed before and, as a result, adding some level of sophistication to what is already in use.

According to CipherTrace, a California-based company dealing with blockchain development and forensic tools, it is anticipated that the illegal dealings by the use of cryptocurrencies could reach up to $1.5 billion.

If compared to what was lost last year, this year’s estimate is about five times more.

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According to the source, the figure does not take into account the transactions from the sales, purchases and commissions earned in darknet markets, and if it did, then it would have undoubtedly exceeded the mark by a great deal.

In an estimate by CipherTrace, the amount lost in the whole of last year is approximately $713 million, way less than the $1.21 billion figure which has been lost in the first half of 2018—an indication that the targets are doing little to up their game.

Why Such a High Figure?

Cryptocurrenices.
According to CipherTrace, a California-based company dealing with blockchain development and forensic tools, it is anticipated that the illegal dealings by the use of cryptocurrencies could reach up to $1.5 billion.

One major factor that has contributed to the high amount is the hacks targeting various crypto exchanges, which is a widespread occurrence.

The issue of the exchange platforms getting hacked is prevalent in 2018 where every cyber fugitive is in a race to see how they can take advantage of their high-value targets.

The other factors are illegal purchases and money laundering, where certain entities—whether single or large—buy virtual currencies in a bid to hide their actual income.

In most cases, those involved in laundering funds wish to evade taxes or are perhaps engaging themselves in dubious undertakings which call for them to be accountable.

When it calls for accountability, then the best option is to use virtual currencies, which happen to be unregulated in most countries.

However, due to the high volatility of cryptocurrencies, it becomes a gamble for the majority of those involved.

Another contributing factor is ransomware, which is a nightmare for the victim.

Once it gets into a computer or a group of computers, it encrypts the contents therein and requests for payments via cryptocurrency.

Depending on the level of sophistication, the mode of operation may vary in one way or the other.

Before Bitcoin was the primary mode of payment, but with the growth of other cryptocurrencies, hackers have seen the need to integrate other options when developing ransomware.

Depending on how fast they spread and who the target is, those engaging themselves in this type of activity have been able to gain financially over the years.

Money laundering as illegal activity.
The other factors are illegal purchases and money laundering, where certain entities—whether single or large—buy virtual currencies in a bid to hide their actual income.

The other cyber threat that has taken over and replaced ransomware is cryptojacking, which makes use of the targeted system to mine cryptocurrency without the knowledge of the owner.

Because of its relative simplicity, it has gained preference among criminals.

Cryptocurrency Transactions in the Dark Web

For the past decade, darknet markets have been created with the purpose of attracting both buyers and sellers so that through sales, they can generate commissions for the longest time possible.

However, this is not always the case as some usually end up falling through law enforcement seizures, hacks or exit scams.

The notable bit is that irrespective of the way of the market has fallen, the victim always ends up losing funds.

The only difference is that depending on how the downfall has occurred, then the victim can either be the admin, the buyer or even the seller.

If it is a seizure by law enforcement, then everyone in the marketplace will lose their money if they never withdrew it from the market wallets prior to the takedown.

If it is a hack, then the situation will vary accordingly. Successful hacks targeting markets usually lead to the loss of funds in the whole market, but individual hacks lead to the loss of funds in a single account.

For exit scams, the buyers and sellers tend to be losers because it is game on the side of the admin.

Black market written on black board.
Truth be told, if the darknet markets were legal, then perhaps we would have one or more of the owners of these markets emerging as one of the wealthiest people on the globe.

To see exactly how the industry is profitable, it’s necessary to look at past seizures for the purpose of knowing much funds are held in the markets.

In this case, previous incidents refer to markets such as Silk Road, Hansa and AlphaBay, which during their time, attracted hundreds of thousands of market users.

Just after the fall of each of the above markets, authorities were able to confiscate hundreds of thousands of Bitcoins which at the time was valued at millions of dollars.

Not only are the funds lost during the seizure of a market, but the admins are also arrested and prosecuted.

If all the funds getting transacted using the various cryptocurrencies could be accounted for, then for sure, the billion dollar mark would be a small fraction given the fact that these markets process thousands of orders on a daily basis.

C.M.

C.M.

With the urge to know more about everything around us, I am an enthusiast researcher and writer with keen interest in expanding my knowledge in a bid to be well versed. Through writing, I express and share my feelings, ideas, and thoughts for like minded individuals.
C.M.
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The articles and content found on Dark Web News are for general information purposes only and are not intended to solicit illegal activity or constitute legal advice. Using drugs is harmful to your health and can cause serious problems including death and imprisonment, and any treatment should not be undertaken without medical supervision.

2 COMMENTS

  1. Anonymous

    Not a problem! The people that participate in these games realize the risk and take it. The unwitting fools that get taken in deserve what they get. Those that get victimized deserve it one way or the other! None of it really matters except to the politicians who try to play it all into votes! So in the end, forget it.

  2. Anonymous

    i got a message from unknown number and need to find who this number belongs too i need help and now

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