Week 6 - Crypto currencies and the dark web Flashcards
(11 cards)
What are the main characteristics of cryptocurrencies like Bitcoin that appeal to cybercriminals? (6 marks)
1) decentralised: no central authority; operated through peer-to-peer networks
2) pseudo anonymous: transactions are public but not easily tied to real identities
3) immutable: once confirmed, transactions cannot be reversed
4) transparent: the blockchain is public and globally viewably.
These traits facilitate anonymous transactions on dark web markets, enabling crime with reduced risk of identification.
Explain how the Tor network enables anonymous browsing and hosting. (7 marks)
Tor encrypts data in layers like a onion, routing it through multiple relays. Each relay only knows the previous and next hop, not the full path. Exit nodes decrypt the final layer to deliver the message. Hidden services use onion addresses and don’t expose IPs. Together, this makes it difficult to trace users or services, enabling anonymous marketplaces.
How did the Silk Road marketplace operate, and what crimes did it enable? (8 marks)
Silk Road was at dark web marketplace on Tor accepting Bitcoin only. Provided infrastructure for vendors and buyers; included escrow and tumblers. Focused on narcotics (~70% of listings), but also sold the fake IDs and digital goods. Finalising early allowed scams and thefts. Enabled global drug trafficking with minimal traceability.
What are mixing services and how do they support anonymity in cryptocurrency transactions?
Mixers combine multiple users coins and redistribute them to new addresses. Obscures links between sender and receiver. Prevents chain analysis by breaking transaction trails. This is often used by criminals post-theft or sale to launder proceeds. Cryptocurrency is often used with marketplaces like Silk Road for anonymity.
Summarise the findings from Christin (2013) on Silk Road’s operation and scale (7 marks)
- Monitored Silk Road for 6+ months
- Found 24,400 items, mainly narcotics
- Estimated $1.2 million/month in total sales
- Operators earned ~$92,000/month in commission
- Most items were available <3 weeks; sellet turnover was high
- It revealed that silk road as a professional, profitable operation with global reach
How do criminals convert Bitcoin into fiat currency while avoiding detection? (6 marks)
- Use of mixers/tumblers to obfuscate transaction history
- Chain hopping: converting BTC to Monero and back
- Crypto ATMs that allow anonymous withdrawls
- Offshore exchanges with weak KYC/AML policies
- Peer-to-peer cash trades via forums or meetups
The techniques above make tracing and enforcement by authorities more difficult.
What challenges do law enforcement agencies face when investigating crimes involving the dark web? (7 marks)
1) anonymity of users and services through Tor
2) cryptocurrency transactions are hard to trace
3) servers and users are often in different jurisdictions
4) privacy focused platforms resist cooperation
5) technical barriers to deanonymisation
6) volatile evidence due to disappearing markets
These factors obstruct investigations and prosections
Explain the concept of ‘finalising early’ in darknet marketplaces and its associated risks (5 marks)
Buyer releases payment to vendor before confirming receipt. They often used to build seller reputation or speed up deals. Risks scams can also come into play where vendors may take funds without delivering. This undermines escrow safety mechanisms and this is a common tactic in fraud and exit scams.
Describe at least three types of illegal goods and services commonly sold on dark web marketplaces. (6 marks)
- Narcotics: cannabis, ecstasy, prescription drugs
- Fake documents: IDs, passports, licenses
- Cybercrime tools: malware, exploits, stolen credentials
Other items include counterfeit currency, weapons, and doxxing services.
What role do escrow systems play in darknet markets, and how do they build trust? (6 marks)
Escrow holds funds until delivery is confirmed by the buyer. It also protects against vendor fraud. Thirdly, platforms act as intermediaries in disputes. Another role, encourage fair dealing between anonymouse parties and it reduces exit scam risk + supports marketplace integrity.
