Crypto Assets and Dark Web Crime: A Double-Edged Sword

With the emergence and development of Crypto Assets, their high level of secrecy and cross-border capabilities have closely linked them in the public's perception to the dark web, money laundering, and other cybercrimes. In fact, the dark web has become one of the most widespread application areas for Crypto Assets.

The former "Silk Road" was regarded as a "dark version of an e-commerce platform" and was a well-known trading place in the dark web, involving various illegal goods such as drugs and firearms. Although the platform was shut down in 2013, activities on the dark web have not disappeared. On the contrary, new alternative platforms continue to emerge, with the scale and number of dark web markets showing counter-cyclical growth. According to statistics, dark web market activities doubled in 2020 compared to 2019.

In 2020, dark web criminal activities occurred frequently, drawing widespread attention. One notable case involved the sale of over 500,000 Zoom account passwords on the dark web, affecting user information from several well-known institutions. This incident highlights the vulnerability of cybersecurity and reflects the rampant nature of dark web transactions.

In dark web transactions, Crypto Assets play an indispensable role. Bitcoin, as the most popular medium of exchange, has set records of over 1 billion USD in dark web transactions in the past year alone. In addition to Bitcoin, other Crypto Assets such as Monero, Litecoin, Dash, and Ethereum are also widely used in various illegal transactions.

The popularity of these Crypto Assets is mainly due to their decentralized nature, ease of transaction, and anonymity. However, these advantages also provide opportunities for criminals, making tracking and regulation extremely difficult.

In response to this trend, industry experts predict that 2020 will be a peak period for decentralized criminal activities. Criminals are turning to new decentralized platforms, such as some encryption communication software, and are bringing in Crypto Assets experts to provide professional advice, which poses new challenges for law enforcement and financial stability.

To address the challenges posed by Crypto Assets, experts recommend establishing a corresponding regulatory system:

1. Use the KYT (Know Your Transaction) feature to identify suspicious transaction activities.
2. Strengthen multi-party cooperation, including information sharing between enterprises, regulatory agencies, law enforcement departments, and exchanges.
3. Promote international cooperation and establish a borderless regulatory system.
4. Play the role of an intermediary for security companies to facilitate information exchange between market participants.

Some security companies have begun to assist law enforcement and regulatory agencies in investigating the movement of involved Crypto Assets through anti-money laundering compliance and investigation systems, providing key evidence chains and KYT information for case resolution.

Faced with the duality of dark web crime, there are different opinions in all sectors of society. Pessimists believe that technology is becoming a tool for crime, while optimists think that we should draw lessons from these highly skilled users and consider how to apply these technologies for the benefit of the public.

In any case, it is unwise to take a dismissive attitude towards Crypto Assets crime. We should recognize both its potential positive applications and the risks it may bring. In the future, close international cooperation and effective use of technology will be key to achieving sound regulation of Crypto Assets. Our goal is to ensure that encryption technology develops healthily while preventing it from becoming a breeding ground for illegal activities and a disruptor of financial order.