Crypto Assets and Dark Web Crimes: Challenges and Regulatory Needs in 2020

Crypto Assets, due to their high level of secrecy and cross-border characteristics, are often associated with the dark web, money laundering, and other cybercrimes. In fact, the dark web is indeed one of the largest application scenarios for Crypto Assets.

In 2013, the famous dark web e-commerce "Silk Road" was shut down by law enforcement. However, this did not completely eliminate the dark web market. On the contrary, new alternative platforms continue to emerge, leading to a counter-trend growth in the scale and number of the dark web market. According to statistics, dark web market activities doubled in 2020 compared to 2019.

In April 2020, 530,000 Zoom account passwords were publicly sold on the dark web, involving users from several well-known institutions. Each account was priced at only $0.002, totaling about $10. Analysts believe this was likely due to hackers using previously leaked account data to carry out credential stuffing attacks. This incident exposed Zoom's shortcomings in user data protection.

Crypto Assets play a key role in dark web transactions. In 2019 alone, the transaction volume of Bitcoin in dark web markets exceeded 1 billion USD. Bitcoin is the most popular Crypto Asset, followed by Monero, Litecoin, and others. The reason Crypto Assets are favored in the dark web is mainly due to their decentralization, anonymity, and cross-border convenience.

In 2020, multiple large-scale data breach incidents occurred, involving social platforms, investment funds, hotel groups, and more. This data is often packaged and sold on the dark web, with transactions mostly conducted using Crypto Assets.

For law enforcement agencies, tracking dark web Crypto Assets transactions presents many difficulties. Criminals often use coin mixing techniques, multiple transfers, and other methods to hide the flow of funds. They also convert Crypto Assets into intermediary currencies such as game currency, which are ultimately exchanged for fiat currency.

In the face of increasingly severe circumstances, industry experts are calling for strengthened regulatory systems:

1. Promote KYT( Know Your Transaction) feature, identify suspicious transactions.
2. Strengthen information sharing and collaboration between enterprises, regulatory agencies, law enforcement departments, and exchanges.
3. Establish international cooperation mechanisms to jointly address the challenges posed by Crypto Assets.
4. Encourage security companies to play a mediating role and facilitate information exchange among all parties.

Currently, some security companies have developed anti-money laundering compliance and investigation systems to assist law enforcement in investigating the movements of involved Crypto Assets. These efforts have played an important role in cracking related cases.

There are different views in society regarding dark web crimes. Pessimists believe that technology is being abused, while optimists think that we should learn from it and explore the positive applications of technology.

In any case, we cannot turn a blind eye to Crypto Assets crime. While recognizing its potential risks, we should also see its future development prospects. Through international cooperation and technological innovation, we can promote the healthy development of Crypto Assets and prevent it from becoming a breeding ground for illegal activities and a factor undermining financial order.