Crypto Assets and dark web Crime: 2020 Trend Analysis and Regulatory Recommendations

Since the birth of Crypto Assets, due to their high level of secrecy and cross-border characteristics, they are often associated with dark web, money laundering, and other cyber crimes. In fact, the dark web is indeed one of the largest application scenarios for Crypto Assets.

In 2013, the "Silk Road," known as the "dark version of e-commerce," was shut down by law enforcement. However, this did not stop the development of the dark web. On the contrary, the scale and number of dark web markets showed counter-trend growth. According to statistics from a data platform, dark web market activity doubled in 2020 compared to 2019.

Dark web crime surged in 2020

In April 2020, 530,000 Zoom account passwords were publicly sold on the dark web, involving several well-known institutions. Each account was priced at only 0.002 cents, with a total price of about 10 dollars. Preliminary analysis indicates that this may have been due to a credential stuffing attack on Zoom.

This incident highlights Zoom's shortcomings in protecting user data, leading to the leakage of sensitive information such as user email addresses, passwords, and personal URL addresses.

The Role of Crypto Assets in Dark Web Transactions

The emergence of Crypto Assets has changed the funding flow model of traditional dark web transactions. According to statistics, Bitcoin alone has created over $1 billion in trading records in the dark web market over the past year. In addition to Bitcoin, other Crypto Assets such as Monero, Litecoin, Dash, and Ethereum are also appearing more frequently in illegal transactions.

In March 2020, data from 538 million users of a large domestic social platform was sold on the dark web. In the same month, the encryption investment fund Tridentt was attacked by hackers, leading to the leakage of 266,000 user data. In February 2019, a seller on a dark web market was selling information of 620 million users, with transactions conducted through Bitcoin, totaling no more than $20,000.

The reason why Crypto Assets are so popular on the dark web is mainly due to their decentralized nature, anonymity, and global circulation, which make transactions more convenient and difficult to trace.

Challenges in Tracking Dark Web Crypto Assets Transactions

Different Crypto Assets have their advantages in dark web transactions. For example, Litecoin has low transaction costs and fast speeds; Monero offers stronger privacy; Dash increases anonymity through mixing technology.

Hackers often use money laundering techniques by utilizing digital currency exchange services to convert Crypto Assets into intermediate currencies such as online game currencies, which are then exchanged for fiat currency. They also employ splitting techniques to divide the Crypto Assets into multiple small transactions, increasing the difficulty of tracking.

Recommendations for Strengthening the Regulatory Framework in 2020

1. Use KYT( Know Your Transaction) feature to identify suspicious transaction activities.
2. Strengthen cooperation between enterprises, regulatory agencies, law enforcement departments, and exchanges to share information for combating crime.
3. Promote international cooperation and establish a cross-border regulatory system to address the global challenges posed by Crypto Assets.
4. Security companies should take on the role of intermediaries to facilitate information sharing among market participants, enhancing the overall security of the ecosystem.

The Duality of Dark Web Crimes

In 2020, incidents of dark web crime occurred frequently, prompting reflection on the application of technology. Some believe this reflects the negative impacts of technology being misused, while others point out that the dark web user community contains a wealth of technical experience that is worth learning from.

When it comes to Crypto Assets crime, we cannot ignore it, nor should we blindly deny it. We should recognize its potential positive applications while being vigilant about the risks it may bring. In the future, through close international cooperation and effective use of technology, we hope to achieve sound regulation of Crypto Assets, promoting their healthy development while preventing them from becoming a breeding ground for illegal activities and a disruptor of financial order.