Law enforcement agencies from Canada, the United States and Australia have managed to bring down Phantom Secure, a privacy-focused tech company.
The agencies regarded it as a threat to the security of their countries because of the products and services offered by the enterprise, which target organized crime units.
In the takedown, the Phantom Secure’s CEO and four suspected co-conspirators have been implicated in the case.
What is Phantom Secure?
Phantom Secure is a company that deals with the encryption of communication devices. Taking a look at their website, the company boasts of being the world’s most trusted communication service due to the encryption capabilities they offer.
Depending on the device, they will be able to offer their services to a client at a fee ranging from $2,000 to $3,000 (USD) for a half-year subscription. So far, the service that attracts the highest number of clientele is encrypting smartphones such as BlackBerry and Samsung.
But BlackBerry was the preferred device by the service, since they would remove the hardware and software and replace it with their own—making it out of reach to a third party, especially investigative bodies.
One can encrypt the email or chat irrespective of whether they are an individual or a company. However, when one is dealing with a group of persons—which is typical in any business—they can choose to create a group chat where the owner must provide admin privileges to a person they trust to manage communication.
An important feature added to this is that whenever a new person joins the group, all members who want to send a message will get a prompt on the Trust Fingerprint Screen. This notifies existing members that a new person has been added to the group chat.
Other security features include the use of the most trusted encryption protocols, such as Double Ratchet algorithm, Elliptic Curve25519, Advanced Encryption Standard-256 and HMAC-SHA256, device to device encryption, the ability to create a private network, a simple verification process and self-destructing messages that run on a timer, among others.
All these features combined add additional layers of security, thus making the services offered by Phantom Secure a preference to many criminals involved in various illegal activities such as those dealing in darknet markets.
But before Phantom realized that their services were being used by criminals, they marketed themselves as a cybersecurity firm seeking to improve the security of those involved in corporations and white collar jobs.
Australia Has the Highest Number of Phantom Users
According to a Department of Justice news release, approximately 10,000 to 20,000 Phantom devices were being used worldwide. Out of those 20,000, around half were used in Australia—an indication that Australia is the company’s leading client base.
The devices acquired were supposedly used to plan the murders of at least two individuals in Sydney.
Since the communication was beyond the interception of law enforcement personnel, they hampered the investigation into the death of two men associated with the Hells Angels biker group—Roy Yaghi, a drug cook, and Tryone Slemnik, a new member.
Outside of Australia, authorities say the devices involved in drug-smuggling operations were also from countries in North and South America, Asia and Europe.
And given the fact that a motion was passed in early 2015 stating that Australian ISPs and telecommunications providers should begin collecting information about their internet usage and telephone calls for two years, it was necessary for criminals to start using other means to communication, and among them was Phantom Secure’s products.
Perhaps this is a clear reason as to why about 50 percent of Phantom products are in Australia.
Following the revelations that the services offered by Phantom Secure were used by criminals to traffic drugs and perpetrate other illegal acts, it was important that the law enforcement agencies in the affected countries come together and disband the enterprise.
Investigations started about a year ago and culminated with the arrest of the company’s CEO, Vincent Ramos. The investigation also named four Phantom associates as alleged co-conspirators—Michael Gamboa, Christopher Poquiz, Kim Augustus Rodd and Younes Nasri. The aliases of the four men were Chino, Caddy, Snowstar and Maestro, respectively.
The five suspects are charged with knowingly participating in an enterprise that targets criminals.
Once the product is acquired by the criminal, they would use it to traffic illegal drugs and firearms, and to facilitate money laundering and cybercrime—all of which happen to be activities readily available over darknet markets.
During the operation that led to the shutdown of the company, about 1,000 Phantom devices were seized in Australia following a raid on properties across the country. The areas in which the raids took place were New South Wales, Victoria, Queensland and South Wales.
Apart from confiscating the encrypted devices, the authorities also seized cash and drugs of those found with the devices.
The arrest of the executives and the shutdown of the company was considered a success for law enforcement agencies involved in such high-level operations where criminals use the aspect of anonymity to perpetrate crime.
At times, it becomes very difficult to track them because not only are their devices encrypted but also because they use other anonymity tools and cryptocurrencies, leaving little to no trace of their identity.
Future of Encrypted Messaging & Use in Darknet Markets
As is true in the recent Phantom Secure takedown, international law enforcement bodies are always quick to work together to bring down major criminal operations. This was also the case during last year’s takedown of AlphaBay and Hansa markets.
The seizure of the two darknet markets happened weeks apart—starting with AlphaBay and followed by Hansa. All of it was a game plan to learn the behavior of darknet market users. But as expected, when AlphaBay went offline, darknet market users rushed to open accounts on Hansa without knowing what was happening behind the scenes.
But as explained in an analysis of darknet market trends and patterns, markets fall at the least expected time. The users are normally left stranded and others counting losses irrespective of the reason for the market going down.
However, the fall of one market will lead to the rise of another hidden marketplace, proving the statement when one door closes another one opens is indeed true.
The same case may be applicable with Phantom Secure. Despite the fact that it was a preference for many online criminals, users will inevitably switch to the next best messaging platform that offers anonymity.
There is also the possibility that someone will develop an encryption-based messaging service that works in the same manner as Phantom products.