Real Crime

How Bitcoin Funds Criminal Activity: From Murderers-for-Hire to Weapons Trafficking

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    Article Details:

    How Bitcoin Funds Criminal Activity: From Murderers-for-Hire to Weapons Trafficking

    • Author

      Adam Janos

    • Website Name

      aetv.com

    • Year Published

      2018

    • Title

      How Bitcoin Funds Criminal Activity: From Murderers-for-Hire to Weapons Trafficking

    • URL

      https://www.aetv.com/real-crime/how-bitcoin-funds-criminal-activity-from-murderers-for-hire-to-weapons-trafficking

    • Access Date

      May 21, 2018

    • Publisher

      A+E Networks

You’re probably hearing a lot about bitcoin lately. At the end of 2017 the digital currency grabbed attention when its value hit at all-time highs of almost $20,000. Only a month later, its price has dropped 50 percent.

Even with the markets fluctuating, experts say bitcoin isn’t going away any time soon. Investors around the world are scrambling to get involved with the cryptocurrency.

But while many are trading in the virtual currency in the hopes of later cashing out—like they would with stocks—there are many others who spend it as money online. Most notably, they are trading it for goods and services on the illegal marketplaces of the dark web, where the easy, instant flow of bitcoin allows users to tap into their darkest natures…all from the anonymous comfort of their home computers.

The Dark Web: What It Is and How It Works 
Much of the internet as we know it exists on the surface web, the portion of the internet that can be accessed using ordinary search engines and viewed using common browsers. Websites that cannot be indexed by search engines are referred to as the deep web: That includes any sites that are password-protected or cannot easily be reached through a search engine.

A fraction of the deep web is comprised of the dark web, the internet’s criminal underworld. This seedy virtual realm can only be accessed through specialized software like Tor, which allows users to browse websites and interact with one another under a cloak of greater anonymity. It’s where people try to buy and sell everything—including murder.

Hitmen for Hire
“Every hitman-for-hire website on the dark web is a scam,” says Eileen Ormsby, investigative journalist and author of the book Darkest Web, to be released March 2018.

That doesn’t stop people from trying to engage them. In Minnesota Stephen Allwine of Cottage Grove is currently on trial for allegedly killing his wife Amy and attempting to make it appear like a suicide. Part of their theory? He purportedly spent thousands of dollars in bitcoin on the dark web and his username, dogdaygod, was listed as contacting to Besa Mafia, an apparent scam website claiming to be run by the Albanian Mafia.

The Besa Mafia offered Mr. Allwine a sliding scale of services: $5,000 to kill her, $6,000 to stage it as a car accident and $12,000 for death by sniper. Mr. Allwine arranged to have her killed at his house. When that didn’t materialize, he began using the dark web to research how he might procure scopolamine, also known as “the devil’s drug,” which causes loss of memory and sleepiness. Investigators found unusually large quantities of the drug in Amy Allwine’s system.

Ormsby says that so-called “white-hat hackers” breached the Besa Mafia site, allowing her to gain access to the list of commissioned hits. But when she brought that list to Australian investigators (her colleague alerted U.S. and U.K. authorities), she said, they were uninterested in the records because no murders had happened at that point.

“We had [evidence of] all these people who paid in bitcoin,” Ormsby says. “We’re talking 20 to 30 people.”

Child Exploitation
While the porous flow of money across international lines is a concern for cybercrimes investigators, there is perhaps no greater issue than the exploitation of children through dark web-arranged sex tourism. The anonymity of the dark web allows users to arrange meet-ups abroad, with payment often provided in bitcoin.

“It’s easy, it’s instantaneous, it’s global,” said a Department of Homeland Security (DHS) official, when asked why perpetrators of child-sexual abuse and assault would lean on bitcoin. (The official requested anonymity due to their ongoing involvement in cyber-crimes investigations.)

Because bitcoin can be spent so easily, the official says that child exploitation is growing around the world today.

Some dark-web sites list themselves as “hurtcore”: where users can watch and share videos of children being tortured. In 2015, a 22-year-old Australian named Matthew David Graham admitted in court that he launched and administered an empire of dark-net websites that provided access to videos of child sex abuse and torture.

“They’re reviled by the rest of the world,” Ormsby says. “The dark web has provided them with a meeting place, without that sort of judgment.”

Terrorism, Weapons and Chemical Warfare  
The free flow of bitcoin on the dark web also means that previously unheard-of weapons are available to the public.

In 2014, 19-year-old Florida man Jesse Korff was arrested for selling ricin on Black Market Reloaded, a dark-web marketplace. Ricin is a highly toxic chemical that the U.S. military developed for biological warfare in World War I. For producing and selling potentially deadly toxins ricin and abrin for use as weapons and conspiring to kill a woman in the U.K., Korff received a prison sentence of 110 months.

In addition to facilitating those who wish to assemble do-it-yourself terrorism kits, bitcoin is also a means to channel money to dangerous criminal outfits.

Chainalysis, a private security firm that helps international law-enforcement agencies track cybercriminals, has worked directly with investigators to track bitcoin that’s being funneled to ISIS.

“We had a support group for ISIS that tried to raise funds by bitcoin donations. They were doing a campaign,” explains Michael Gronager, CEO and co-founder of Chainalysis. Using advanced software, Gronager says, his company was able to find the origins of the funds. Still, he adds, illegal international money laundering continues to be a challenge facing investigators of bitcoin-related crime.

Drug Trafficking
For all the illegal uses of bitcoin on the dark web, none is more commonplace than drug trafficking.

In 2013, the FBI shut down the Silk Road, the dark web’s biggest online drug marketplace. A year later, they shut down a new iteration of the website. According to the DHS, the site’s owners were making $8 million per month at the time of the second (and final) seizure.

In its stead, numerous other marketplaces, such as Alphabay and Hansa, popped up. These too were shut down.

Despite this, the online drug market is bigger today than ever before. According to a 2017 report from the London School of Economics and Political Science, drug users in America are twice as likely today to buy illicit substances online than they were three years ago.

“You could argue it’s sort of whack-a-mole right now,” said the DHS official in describing the seizure and proliferation of online markets, adding that increased user traffic further grows the problem.

“People are just understanding [the dark web] for the first time. They don’t know how dangerous it is.”

Related Features:

How Ross Ulbricht Made It Easy to Buy Drugs and Guns on the Dark Web

Biography: Ross Ulbricht, Creator of Silk Road

Got a Parent in Prison? This Drug Lord’s Son Wants to Help

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