One Million Bitcoin Held By Dark Web Marketplaces and Cybercriminals, Chainalysis Data

Data from Chainalysis reveals that nearly one million Bitcoin is circulating on the dark web between bad actors and illicit darknet markets being moved through reputable exchanges. 

According to Chainalysis, roughly 900,000 Bitcoin (BTC) is being held by cybercriminals and darknet markets on the dark web with reputable cryptocurrency exchanges acting as crucial links within the underground space.

While Chainalysis reveals that less than 1% of Bitcoin transactions are illegal the graph above still shows an alarming picture. Reading the data, it shows 892,000 BTC being held on the darknet is broken down as; 585,000 BTC is being held on illegal darknet markets; 205,000 BTC in stolen funds are circulating on the dark web; 99,000 BTC is attributed to scams and all others hold an additional 3,000 BTC.

According to Chainalysis, only 0.32% of all current Bitcoin flows are tainted by illicit activity.

Cryptocurrency exchanges are still being leveraged heavily for illicit Bitcoin transactions which is consistent with the BTC movements of the recent illicit gains made by cybercriminals during the recent hacks on Twitter.

Chainalysis Launches Market Intel

As recently reported by Blockchain.News, Chainalysis has launched Market Intel, a new website catered to asset managers and regulators for access to live crypto data and insights. Chainalysis’ Market Intel will leverage the firm’s proprietary data, which has been collecting and linking to real-world entities since 2014.

Regulators and compliance professionals are currently leveraging Chainalysis on-chain data, which provides information regarding transactions registered on blockchain, which helps these individuals to detect and investigate illicit activities. Chainalysis is looking to bridge the gap for traditional institutional investors, as the firm believes that cryptocurrencies are poised to become a mainstream asset class.

Darknet Empire Offline for Days Has Users Fearing DDoS Attack and Looming Scam

A popular darknet marketplace, Empire Market, has been reported to be offline for over 48 hours, making website users fretful as to the cause behind it.  

Empire Market Goes Down

Empire Market, a darknet behemoth, is often leveraged by users to buy and sell illicit goods, ranging from counterfeit goods to malware and illegal drugs. Payment methods accepted for illicit goods and services sold on the platform include Bitcoin (BTC), Litecoin (LTC), and Monero (XMR).  

The dark web giant has been offline for so long that the unusual activity sparked concern and speculations from its darknet customers. Clients of Empire Market have been wondering whether the dark web service has fallen prey to a distributed denial-of-service (DDoS) attack once again.  

In a DDoS attack, what typically happens is that the targeted server or network’s regular traffic is disrupted by malicious entities through an overflooding of Internet traffic. As a result, multiple systems are compromised due to the flooding of the targeted network’s bandwidth and resources. Consequently, a DDoS attack leads to a shutdown of the machine network.  

In the past, Empire Market had already been subject to DDoS attacks that kept the dark web offline for an extended amount of time. Darknet users’ hypothesis that Empire Market might be the victim of yet another distributed denial-of-service attack may therefore be valid. While some suspect a DDoS attack, others are scared that they may potentially be in the middle of an exit scam, which is a trick where a given business halts its shipment orders to customers while still receiving payment for new orders.  

Dark Web Answers 

In response to all this, Dark.fail journalist, an anonymous writer specialized in Tor, commented on the incident and said that this time around, the Empire Market’s inactivity felt even more stressful than when it underwent downtime in 2019 due to DDoS attacks.  

Dark.fail said, “We are ~36 hours into Empire Market being completely offline. Last year extended periods of downtime were common before the Endgame DDoS filter was released. After months of nearly perfect uptime, this downtime feels more stressful than the frequent Empire downtimes of 2019.” 

Online figure “Se7en,” who claims to be one of Empire Market dark web’s head moderators, addressed the issue. In a statement released on Twitter, Se7en said:   

“If the market is still down in a couple of days, I’ll make a post about the whole situation then, it’s early days and maybe the admins will bring it back.” 

The dark web community on Reddit also jumped in at this point, sharing a post from Empire Market’s team that dark web users of “the many false narratives and fear, uncertainty and doubt (FUD) circulating.” In the post, Empire Market attempted to reassure its users by saying that they were hard at work and “doing anything safely takes time.” 

Blockchain for Better Security

With the surge of cybercrime in this increasingly digital age, numerous Asian countries have been reported to have increased the adoption of blockchain for security purposes.  

Blockchain has been leveraged recently in various domains, ranging from school institutions using it to ensure server and network security to an Asian country adopting it for digital driving license purposes. South Korea has leveraged the decentralized ledger technology to offer a blockchain-powered driving license alternative. This option has resulted in one million South Korean drivers making the switch from a physical driver’s license to a digital blockchain-fueled one. 

Darknet AlphaBay Moderator Paid in Bitcoin Sentenced to 11 Years in Prison

A darknet moderator for marketplace AlphaBay has been apprehended by law officials and sentenced to 11 years in prison. 

FBI Cracks Down on Crypto-Driven Darknet

Bryan Connor Herrell, a 26-year-old man from Colorado, has been sentenced by the US Department of Justice for his part as a moderator for an illegal darknet website that conducted illicit transactions, from selling guns and drugs to credit card numbers. Previously considered the world’s largest online drug marketplace, AlphaBay has now been shut down.  

Speaking on the matter, Special Agent in Charge for the FBI Sean Ragan said:  

“The FBI is committed to developing highly trained cyber investigators […] to counter the threat darknet criminals pose. Cases like these exemplify how the FBI and our international partners are eliminating the false promise of anonymity dark marketplaces claim to provide.” 

He added that the capture of Herrell was “a clear message to criminals that the darknet is no safe haven for illegal transactions.”  

Since the arrest of Herrell, the darknet website, which operated by Bitcoin and cryptocurrency payments for illicit transactions, has been shut down. Law officials were adamant that this was an exemplary case scenario that demonstrated that “criminals cannot hide behind technology to break the law.” 

Herrell was known to be the moderator for AlphaBay, conducting business online under the usernames “Penissmith” and “Botah.” He also adopted the role of a scam watcher, which entailed that he monitored cyber attack attempts aimed at defrauding AlphaBay users. For his role in moderating the darknet marketplace, Herrell was paid in Bitcoin. 

Founder of AlphaBay Arrested

In June 2017, the alleged founder of AlphaBay, Alexandre Cazes, was arrested and indicted. Through passkeys and codes stored on Caze’s personal laptop, law enforcement was able to track other individuals involved with managing AlphaBay. However, Cazes was found dead in his jail cell prior to his indictment, and law enforcement went on to investigate the other members of the darknet marketplace.  

US Attorney Scott spoke about the ongoing fight to take down dark web sites, which facilitate illicit activities involving guns, drugs, stolen data, credit card numbers, to name a few: 

“Operating behind the veil of the darknet may seem to offer shelter from criminal investigations, but people should think twice before ordering or selling drugs online – you will be caught.” 

Along with Silk Road, AlphaBay was known to be one of the biggest online darknet markets before being shut down.

Darknet Marketplace Empire Disappears 

Recently, darknet marketplace Empire Market has been reported to have exit scammed and made off with around 2,638 Bitcoin (BTC), which translates to around $30 million. 

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