Friday, May 11, 2012

What Bitcoins can buy you in the criminal underground

Jeffrey's previous post noted that the FBI was concerned about Bitcoins and their potential to be used to procure illegal items or facilitate agreements that otherwise would have drawn attention if done in regular currency.  It is actually pretty startling to see what exactly Bitcoins can be used to purchase in the criminal underground. Because I would prefer not to draw the ire of those who run these sites by sharing screenshots of all of them, I will merely describe a few of the interesting things I have seen.

1. Quite handy to criminals, there are multiple sites which will blatantly "launder" your Bitcoins, making them much harder to track. Essentially, your coins are fanned out through the "fog" of transactions occurring, and when they return to you it becomes extremely hard to identify what Bitcoin was used for a certain transaction.

2. There are now a series of underground sites where drugs can be bought and sold with Bitcoin. The DEA recently busted the "Farmers Market" which had been in existence for a very long time. Part of the failure of the Farmers Market was that the site itself was involved in all of the trades - by verifying the products of sellers and escrowing money. The new sites, including the Silk Road which has been described elsewhere, defeat this purpose by making the site merely the forum to connect individuals to illicit substances. This is very interesting, because it involves a very high level of trust between individuals who are clearly typically untrusted. Essentially every drug you could think of can be bought, including schedule I, II, and III substances.

3. A recent trend has been to start up gun-running operations on Tor, which, much like the drug operations, facilitate arms trades between individuals for Bitcoins.

4.  One can also rent botnets for specific time frames, or buy an entire botnet, if they have enough money (and are properly motivated).

5. The most troubling site I have seen is one which offers "murder-for-hire."  The price is relatively steep, and it's a pay 50% beforehand, pay 50% afterward type of deal. If such a site is legitimate, it is pretty frightening. However, it is not hard to imagine that a criminal may set up this site, sucker people into paying the first 50%, delay long enough to grab deposits from others, and then close up shop with cash in hand.

6. Lastly, Tor is not without its bargain shoppers. A coupon site exists, where an individual will make you a coupon for any item you would like, giving you 50% off.

Clearly, the digital dark-side has moved "below" the internet and under the radar to some extent to protect its interests. When surfing Tor-hosted sites, individuals commonly refer to the regular internet as "clearnet" - and lament its insecurity due to alleged government infiltration. Recent cybersecurity legislation has only added fuel to the flame, and the NSA's construction of a Data Center in Utah is the cause célèbre for big brother speculation.

The new cybercrime cases we are likely to see will arise from these areas as criminals dig in even farther.


  1. You fail mention that the drug site "Farmers Market" that was shut by the DEA, used Paypal as their transaction currency.

    Most criminal transactions are performed using Federal Reserve dollar bills, not Bitcoin. Please stop trying to demonise Bitcoin. Bitcoin will benefit the whole world if it takes off.