The year 2019 and 2020 have been marked by profound dark web and crypto volatility as marketplaces emerged to replace seized platforms.
The mid-2020 situation changed a great deal, even as vendors and buyers seemed to be in a race to adapt to the economic ramifications of the coronavirus pandemic. Nonetheless, even as the current dark web status has calmed considerably, the darknet space continues to circumvent law enforcement interference in challenging ways.
One such tactic is the technique of Bitcoin mixing which, essentially, looks to advance the anonymity of crypto transactions. Bitcoin mixing complicates the process of tracing dark web transactions that depend on virtual currencies – mainly Bitcoin.
Bitcoin mixing involves a practice where sets of the cryptocurrency are mixed with counterpart groups of the same monetary value. By doing this, the original identity of the Bitcoin is obscured and kept off the law enforcement radar.
The popularity of bitcoin mixing services seems to have taken an upward trend over the last few years. In fact, a May 2020 report by the blockchain analytics firm Bitfury’s crypto research arm Crystal Blockchain reflected on the rise in the dark web’s use of bitcoin mixers.
According to the research, the amount of Bitcoin that was transferred by dark web marketplaces to mixing services grew to 20 percent in the first quarter of the year 2020 – a figure that contrasted sharply with the 1 percent share of Bitcoin that was sent in the previous year.
Importantly, the European law enforcement agency Europol released a recent report to support the findings on crypto mixers. Europol linked two Bitcoin wallet services, Wasabi and Samourai, to much of the dark web’s cases of crypto transaction mixing.
Bitcoin Mixing for Enhanced transaction Anonymity
The details provided by Europol’s Internet Organized Crime Threat Assessment October 5 report sought to elucidate on a number of factors relating to all things cryptocurrencies and the dark web ecosystem.
In highlight, the law enforcement agency reported that Wasabi and Samourai – both platforms being considered by crypto users as privacy-enhancing avenues – were very popular among the criminal segment of the dark web community.
Case in point, perpetrators of the brazen online Twitter attack were said to have used Wasabi to move some of the cryptocurrency that was earned in the high profile cybercriminal attack that saw the hijack of the platform’s celebrity profiles.
The Europol report insisted on the role played by privacy-enhanced wallet services in facilitating dark web crime by virtue of the fact that they have become a top threat in addition to the already-established centralized Bitcoin mixing services.
According to Europol researchers, Wasabi and Samourai Bitcoin wallets boast of advanced decentralized mixing capabilities and Tor integration. The report cited Samourai’s notable features such as the remote wipe SMS commands when users find themselves in a cybersafety emergency.
Point to note, the two decentralized wallets have not been designed to erase the link between the origin and destination of user cryptocurrency, but are meant to consolidate transaction anonymity by making it much more difficult for third party actors to trace the exchange of virtual coins.
It is for the above reason that researchers have noted the increased adoption of privacy-enhancing wallets by dark web markets. Cybercriminals are also reported to have increasingly adopted the application of hardware wallets – the physical devices that secure the private keys and seeds belonging to a long list of digital currencies.
To conclude, even as the Europol report focused on privacy-enhancing crypto wallets, the rise in privacy-focused cryptocurrencies happen to form part of the entire system of mechanisms set by dark web actors to operate profitably, and without law enforcement interference.
