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Sunday, March 22, 2015

After Silk Road: Like Hydra The Darknet Is Bigger, Deeper & Darker Than Ever

After Silk Road: Like Hydra The Darknet Is Bigger, Deeper & Darker Than Ever

Photo Credit: Data Manager Online
Let's get some definitions out of the way right off the bat, because a lot of people confuse the Dark Web with the Deep Web. We're basically dealing with three distinct concepts.
The Surface Web is anything that can be indexed by a typical search engine like Google, Bing, Yahoo, etc.
Conversely, the Deep Web is anything that a search engine can’t find. For example, when you conduct a search on a website using a search box, you will extract results from the Deep Web. Government databases and libraries are home to massive amounts of Deep Web data.
And, the Darknet (also known as the Dark Web) is just a small portion of the Deep Web. It has been intentionally concealed and is inaccessible through standard web browsers like Firefox, Chrome and Internet Explorer. You can't get there from here.--at least not directly.
So, how is it accessed? Most often by way of TOR. The TOR network is an anonymous network which is accessed with a special web browser, called the TOR browser. It provides anonymity and is the avenue that leads to the illegal activities, such as those conducted on Silk Road, on the Darknet. It's the part of the Internet most infamously known for a variety of illicit activities.
Bottom line: the Darknet is simply a small portion of the Deep Web.
Not all Dark Web sites use Tor, however. Some use services such as I2P, and that would include Silk Road Reloaded, which emerged last month.
Gizmodo UK reports:
The infamous Silk Road resurrected itself like a junkie phoenix this month, leaving its long-time residence on Tor for a new anonymising service called the Invisible Internet Project, or I2P. News of the high-profile dark market's new address nudged the little-known I2P into the spotlight. Now, after a decade in the dark, the project is emerging as an alternative destination for cybercrime, and a strong complement or even alternative to its older sibling Tor.
I2P is the very deep web. The software project hosts sites that are not accessible through general search engines like Google, and, like Tor, anonymises traffic by ping-ponging it from proxy to proxy. Every machine using I2P acts as a router, which makes I2P a fully decentralized service. This is a security strength, since traffic can travel down different network paths in a way that frustrates any attempts at man-in-the-middle attacks. All traffic is encrypted end-to-end.
But unlike Tor, it's a terrible way to anonymously browse the internet outside of I2P, and by terrible I mean completely useless. I2P isn't designed to let you look at the BBC or YouPorn or anonymously. It's designed to let you browse 'eepsites' which are the sites hosted within the I2P intranet. This is a key distinction, and a reason why I2p and Tor are really more complementary services than rivals when it comes to web browsing.
Here's how underground I2P still is: The Electronic Frontier Foundation, a leading advocate of online privacy, hasn't really bothered investigating the 12-year-old anonymising service yet.
"I haven't found anyone who has taken an in-depth look at I2P yet," EFF media relations director Rebecca Jeschke told me in an email.”
While the main currency of the Darknet is Bitcoin, Silk Road Reloaded reportedly accepts at least 8 different types of cryptocurrencies, including Darkcoin. Traffic appears to be relatively light, so far, on Silk Road Reloaded, but elsewhere on the Darknet business is booming.
Silk Road was one of the pioneers of underground online marketplaces. When law enforcement agencies arrested Ross Ulbricht (Dread Pirate Roberts) in October 2013, the FBI said it had turned over $1.2 billion in just a little over two and half years, netting its owners over $80 million in profits.
Then, in November 2014 Brian Farrell (DoctorClu), second in command on Silk Road 2.0, faced charges for intent to distribute illicit drugs through the site. Blake Benthall (Defcon), the Kingpin, was also taken into custody late last year.
But, in the aftermath of these arrests and site takedowns, it looks as though the authorities’ efforts had virtually no impact.
"Participants who are in the black markets learn from what law enforcement is doing and change their tactics, adapt their tactics," says Lillian Ablon, a cyber-security researcher at RAND Corporation. "People who are not in the markets are now aware of the low-risk, high-gain of getting into these markets or the products that they could buy.”
The Dark Web operates essentially like Hydra and law enforcements’ efforts are swiftly met with new illicit marketplaces that deal in street and prescription drugs, weapons, prostitution, identity theft and more. Compared to some of the new markets that now populate the Darknet, Silk Road was relatively tame.
Some researchers maintain there are thousands of hidden services running on the Darknet. Two of the largest Darknet marketplaces are Agora Marketplace and Evolution Marketplace—both offer illicit products and services while primarily using Bitcoin as currency. The Darknet is also inhabited by individuals who are simply concerned about privacy and government surveillance who are not there for unlawful purposes.
In the marketplaces, consumer protection is built into the system by way of a vendor review system similar to that of Amazon. It helps to insure delivery of the products and services purchased.
Since the close of Silk Road in 2013, drug listings on the Darknet are estimated to have more than doubled. Agora Marketplace is absolutely thriving. A report by the Digital Citizens Alliance states that a total of 19,274 products are listed on Agora Marketplace and out of those, around 13,236 are drug listings. Agora Marketplace ranks second to Evolution Marketplace which has approximately 14,706 drug listings in total.
The Darknet is also an old stomping ground for hackers and hacktivists. Anonymous, for instance, has been very busy with several operations--#OpIsis (shutting down terrorist websites and social media accounts), #OpIran (a human rights campaign), #OpDeathEaters (exposing those involved in the sex slavery and child porn industry) and #OpSafeWinter (addressing homelessness worldwide)--to name a few. Many Christians, conservatives and others are now viewing the hacktivist collective in more positive terms. Anonymous operations are now viewed by many as much needed activism, though they may not necessarily agree with all of the various ops.
One of the comments most often seen across social media in regard to #OpISIS, for example, is that the Anons are simply doing what world governments should be doing but aren't. Shutting down websites and social media accounts won't stop terrorism, but it can slow it down. At the very least, it can dole out a strong dose of psychological warfare.
So, what's the next move for the authorities? Europol’s Troels Oerting is exceedingly confident that the remaining Darknet sites can be tracked down and dissolved. “This is just the beginning of our work. We will hunt these sites down all the time now,” he said, praising the cooperation of all the international law enforcement agencies involved. “We’ve proven we can work together now, and we’re a well-oiled machine. It won’t be risk-free to run services like this anymore.”
More promising, though, is a new search engine which is under development by DARPA. It would illuminate the dark web and uncover patterns and relationships in online data. The data would be used to help law enforcement track illegal activity.
Wired reports:
The project, dubbed Memex, has been in the works for a year and is being developed by 17 different contractor teams who are working with the military’s Defense Advanced Research Projects Agency. Google and Bing, with search results influenced by popularity and ranking, are only able to capture approximately five percent of the internet. The goal of Memex is to build a better map of more internet content.
'The main issue we’re trying to address is the one-size-fits-all approach to the internet where [search results are] based on consumer advertising and ranking,' says Dr. Chris White, the program manager for Memex, who gave a demo of the engine to the 60 Minutes news program.
To achieve this goal, Memex will not only scrape content from the millions of regular web pages that get ignored by commercial search engines but will also chronicle thousands of sites on the so-called Dark Web—such as sites like the former Silk Road drug emporium that are part of the TOR network’s Hidden Services.”
But, not everyone is as optimistic. It has long been held that the FBI is simply outpaced by cyber criminals. Shawn Henry, who retired from the FBI after more than two decades with the bureau has pointed out that the current public and private approach to fending off hackers and others is "unsustainable.'' Computer criminals are simply too talented and defensive measures too weak to stop them.
Hence, the Darknet game of cat and mouse continues.

Silk Road forum moderator pleads guilty

Silk Road forum moderator pleads guilty

NEW YORK – A former aide to convicted Silk Road mastermind Ross Ulbricht pleaded guilty Friday to charges he helped run the sprawling darknet drug-trafficking bazaar.
Peter Phillip Nash, 42, admitted he spent 10 months as a forum moderator at Silk Road, an underworld version of eBay that served as an online marketplace for millions of dollars worth of transactions in drugs, fake IDs and electronic hacking tools.
Silk Road operated from 2011-2013 and was accessible only via a special electronic browser designed to keep users' identities and activities private. The marketplace required all transactions to be conducted in bitcoins, an anonymous form of electronic currency. Silk Road took a percentage fee on every deal.
Dressed in dark jail clothing, Nash, an Australian citizen, told U.S. District Judge Thomas Griesa he took the Silk Road post because he could both socialize online and buy drugs for personal use. He never met Silk Road's operator and knew the person only by a pseudonym, he said.
Using the online names "Samesamebutdifferent," "Batman73" and others, Nash said he was paid between $25,000 and $30,000 in all to watch for scams, answer questions from buyers and sellers and anything related to child pornography or spam.
All the money went to "purchasing drugs for my on consumption," he said. "I deeply regret my conduct and any consequent harm I caused."
Nash faces a mandatory minimum prison term of 10 years and likely deportation from the U.S. for his guilty plea to charges of narcotics trafficking conspiracy and money laundering conspiracy. However, defense lawyer Andrew Frisch said the minimum punishment would not apply due to a legal safety valve provision in federal sentencing guidelines.
Griesa scheduled sentencing for May 26.
Nash's guilty plea came weeks after a federal jury in the same lower Manhattan courthouse convicted Ulbricht of narcotics trafficking, conspiracy, participating in a continuing criminal enterprise and other charges for founding and running Silk Road.
The panel of six women and six men rejected defense arguments that Ulbricht — who used the nom de Net Dread Pirate Roberts — turned Silk Road over to unidentified others soon after he launched it. The jurors returned the verdict after little more than three hours of deliberation at the conclusion of a more than three-week trial.
Ulbricht, 30, faces a mandatory minimum prison term of 20 years and could face life behind bars for the conviction. He's tentatively scheduled to be sentenced May 15 by U.S. District Judge Katherine Forrest, who presided over the trial.
The convicted mastermind's legal team last week filed a motion seeking a new trial. Ulbricht's lead attorney, Joshua Dratel, argued that prosecutors improperly failed to disclose evidence that could have helped support Ulbricht's claims of innocence in sufficient time for the defense to make full use of the material at trial.
Prosecutors are scheduled to file a response to the motion next month.
Two other accused Silk Road administrators suspects have been charged in the darknet investigation.
Andrew Michael Jones pleaded guilty in October as part of a government cooperation deal. He was initially listed as a government witness for Ulbricht's trial, but prosecutors ultimately did not call him to testify.
Gary Davis is in Ireland, amid an extradition effort to bring him to the U.S. for prosecution.

The federal case of Austin native Ross Ulbricht

The federal case of Austin native Ross Ulbricht, found guilty of creating and operating the anonymous online marketplace Silk Road, could have harmful implications for civil protections against unlawful search and seizure in the digital age, his mother said Monday.
Back home for South by Southwest, Lyn Ulbricht, who has been living in New York, where her son is incarcerated and his trial played out last month, said the Silk Road case had lowered the standards of evidence required for search warrants.
It expanded the power of authorities to go through laptops, email and social media accounts, she said. Among the key questions it raised — and an issue now at the center of a pending motion for a new trial — is whether investigators can search and seize a foreign server without a warrant.

Lyn Ulbricht speaks at SXSW session on landmark Silk Road case photo

“A case like this sets precedent, and precedent influences future cases, which influences case law, which impacts all of our lives,” she said to an audience of about 50 people at the Austin Convention Center.
The U.S. attorney’s office with the U.S. Southern District of New York on Monday declined comment.
Ross Ulbricht, who is scheduled to be sentenced May 15, is facing up to life in prison.
Federal authorities arrested him in October 2013 in a San Francisco public library. He was convicted of seven drug and conspiracy counts after he was charged with drug trafficking, computer hacking and money laundering; a separate indictment in Maryland accused him in a failed murder-for-hire plot.
At his trial, prosecutors said the former Westlake High School student enabled more than 1 million drug deals on Silk Road and made about $18 million in the cryptocurrency, Bitcoin. They said sales of illegal drugs of every type, representing at least $180 million, were delivered through the website, which has been described as an eBay of sorts for the illicit.
In a brief interview with the American-Statesman in 2013, his grandmother, Martha Ulbricht, said his family was stunned by the allegations.
On Monday, his mother said she believed her son had not had a fair chance at justice.
Lyn Ulbricht said the decks had been stacked against him from the beginning: A powerful U.S. senator put pressure on prosecutors. The government dumped a mountain of evidence on the defense just a week before trial, and the judge suppressed key witnesses and information that could have been used to challenge the technical aspects of the investigation.
Witnesses said there were multiple “Dread Pirate Roberts” operating Silk Road. Yet, prosecutors painted her son as a ruthless kingpin, motivated by power and money, and who would stop at nothing to protect his empire, she said.
Erased from his case was “the real, peaceful, liberty-loving Ross” and the loving family who supported him, Lyn Ulbricht said.
“It was like the Titanic before it went down,” she said. “But as far as the truth, we know the tip of a very large iceberg.”

Millions of dollars missing amid mysterious closure of 'dark web' marketplace Evolution

Can You Ever Trust Your Online Drug Dealer Again?

Drugs for sale on dark web marketplace Evolution. Drugs for sale on dark web marketplace Evolution.
The online drug trade was dealt another blow this week. Evolution, a massive website for buying drugs on the so-called dark web, suddenly disappeared on Tuesday, along with millions of dollars in its users' Bitcoins.
The leading store for illicit e-commerce, it seems, was an elaborate scam. In online forums, users of the site mourned their lost money, called for blood, and desperately hoped their last order of pills would show up in their mailboxes.
As recently as two years ago, online black markets worked well enough that many thought buying drugs there was on its way to being as safe and easy as dealing in braided necklaces on Etsy. That utopia began to crumble with the seizure of online black market Silk Road in 2013 and the arrest and conviction of Ross Ulbricht as the mastermind behind the site. It's been tumultuous days ever since. Law enforcement busted dozens of dark web marketplaces in November, and German police last week seized a third of a ton of drugs from a single online dealer.
But if police are threatening the dark web, so are the people who use it. Evolution isn't the first marketplace to be caught up in what's known as an exit scam, where operators shut down a website and take their users' money with them. Since these sites owe their existence to clever technology allowing private and secure transactions, the question naturally arises: Can more of this kind of tech save the underworld from its own worst tendencies?
The answer is a resounding maybe.
Dark web marketplaces require the use of several types of specialised technology: Tor allows people to browse the web while hiding their identities, and Bitcoin lets them transact their business more discreetly than they could through the traditional financial system. Even with these tools, there's a dilemma: How does an anonymous drug user trust an anonymous drug seller to deliver the desired product?
The solution has been marketplaces that operate as neutral brokers. Buyers and sellers rate one another, much as they do on eBay or When someone makes a purchase, her money is placed in an escrow account controlled by the marketplace and is released only when the drugs have arrived.
The product offered by sites like Silk Road and Evolution, in other words, is the ability to trust otherwise untrustworthy people.
"They're not monetising the sale of drugs. They are monetising the ability to reverse a transaction," says Nicolas Christin, an assistant research professor at Carnegie Mellon University who studies the Dark Web. "They're monetising the escrow systems."
What reason is there to trust the marketplaces? For the most part, credibility is built the old-fashioned way — by not running off with the Bitcoins. Silk Road operated without any real way to guarantee against its operators' ripping off its users. Subsequent marketplaces have largely done the same.
Some people involved in the dark web have been pushing for a more technological safeguard, known alternately as multiparty signature and multi-signature escrow. This is a technology built into Bitcoin that keeps transactions from being completed until two of three parties involved sign off on the deal. Think of it as a bank deposit box that requires authorisation from the account holder and a bank officer to access.
Evolution claimed to support multi-signature escrow, although there are conflicting accounts of whether the feature ever actually worked. The same is true of Agora, the black market site most likely to gain from Evolution's disappearance. What is clear is that few people actually use this protection when buying drugs online. In part, this is because it's just easier not to take the extra step. You know, they're busy.
Even if a dark web marketplace isn't planning to abscond with its users' money, it has an incentive not to support the technology. All Bitcoin transactions are tracked in a record known as the blockchain, and multi-signature transactions are identifiable as such. Because almost no one bothers to use this feature now, a marketplace that suddenly started implementing it would risk outing itself to law enforcement.
"There are a FEW legitimate transactions that are multiparty signatures, but for the most part it only happens amongst three or more mutually distrusting parties: the multiparty transactions are the drug deals, and if the feds ever find out either a buyer or a seller, the blockchain now DIRECTLY records the other side," writes Nicholas Weaver, a security researcher at the University of California at Berkeley.
Insecurity doesn't seem to be damping demand. Just before Silk Road was shut down, there were about 13,000 listings for drugs on the site, and 18,000 such listings on the dark web overall, according to the Digital Citizens Alliance. On the day Evolution vanished, there were 19,900 drug listings on that site alone, and 41,900 in all.
Distrust in marketplaces has caused a number of large dealers to take their customers off the markets and continue selling them drugs directly through their own secret sites, earning loyalty through their continued good names, says Tim Bingham, an independent researcher studying the drug trade. He says three or four major dealers have done this since the Silk Road shutdown, although he adds that they probably also continue to do business on marketplaces like Agora.
There will inevitably be more scams, says Carnegie Mellon's Christin, because the temptation is just too strong for criminals who build successful online drug bazaars. "If you run a marketplace long enough, either you're going to be in jail or you're going to steal the money that's in escrow," he says.
Even if drug users realise they're likely to get ripped off occasionally, many of them probably see this as the cost of doing business.
"You have to consider what the competition to these marketplaces is," Christin says. "Buying drugs on the street."