Remember the good old days when drug dealers sold their wares on street corners?
Of course, that still happens, but talk to a narcotics investigator today and you will find many run into a virtual brick wall in their investigations as they track drug supply sources to the darknet.
What is the darknet?
The darknet is a portion of the internet that is not indexed, allowing for greater anonymity among users. It is accessed through the use of free communications software like The Onion Router (TOR) or a similar browser.
When combined with cryptocurrencies like bitcoin, the darknet creates a digital black market with generous offerings of narcotics, child pornography, weapons, counterfeit currency and stolen identities.
TOR, which anonymizes internet traffic, was created in the 1990s by the United States Naval Research Laboratory and DARPA to help facilitate encrypted communication for United States intelligence assets. Today TOR is used by individuals who wish to maintain anonymity on the internet and can include anyone from criminals to spies or activists living in totalitarian regimes.
A large portion of the darknet is used for narcotic sales. The Silk Road website – used to sell illegal drugs and shut down by the FBI in 2013 – was one of the more famous darknet sites, although there are many more and they change often.
What are cryptocurrencies?
Cryptocurrencies are virtual currencies that differ in style and value and are usually non-fiat.
Bitcoin is the best-known cryptocurrency. It is currently trading around $2,700 for 1 bitcoin, although the price can fluctuate wildly.
Bitcoin relies on a technology called the blockchain. The blockchain is a public ledger for all bitcoin transactions. Bitcoin miners can earn bitcoins by solving the algorithm required to verify transactions and thus maintain the blockchain.
A publicly available ledger like the blockchain prevents counterfeiting, speeds up verification of transfers and can lead to some interesting analysis because every transaction is exposed to the public.
Blockchain technology has attracted attention from the banking industry because it enables fast, cheap and verifiable value transfers.
A recent article in The Economist explains the growing virtual drug market:
Though online markets still account for a small share of illicit drug sales, they are growing fast – and changing drug-dealing as they grow. Sellers are competing on price and quality, and seeking to build reputable brands. Turnover has risen from an estimated $15m-17m in 2012 to $150m-180m in 2015. And the share of American drug-takers who have got high with the help of a website jumped from 8% in 2014 to 15% this year, according to the Global Drug Survey, an online study.
Large portions of darknet drug purchases in the D.C. region involve synthetic drugs, concentrated THC derivatives and opiates like fentanyl. The ease of purchasing these drugs in large quantities and their addictiveness have changed the behavior profile of some drug dealers and customers.
As the opiate epidemic has shown, opiate addiction strikes its victims regardless of age, race, religion or creed. This is no longer an inner-city problem (if it ever was) relegated to rough neighborhoods. The darknet has helped expand the heroin epidemic into new markets while making investigation and prevention difficult for traditional law enforcement investigative techniques.
Nerds are dealing drugs too!
The darknet provides a technically sophisticated high school student with the ability to order a large number of dangerous drugs. In a sense, the act of dealing and purchasing narcotics is “safer” because face-to-face encounters are no longer necessary.
Operational security for drug dealers involved in darknet purchases differs from a traditional drug dealer in that territory and physical dominance are no longer a controlling factor to market entry. Instead, operational security for the darknet drug dealer revolves around obscuring IP addresses and financial transactions through technological means, dead man’s switches on laptops and counter-surveillance.
Darknet drug dealers spend hours and days traveling to different mailboxes to drop their packages to avoid a detectable pattern. Often, darknet drug dealers are attracted to these illegal endeavors out of novelty. They seek the challenge as a way to prove their intelligence. If you ever have the opportunity to interview a darknet dealer, their ego is their biggest weakness. Feed their ego just a bit and they will start talking.
Just because darknet dealers defy stereotypes, they are still dangerous. It is true that darknet drug deals reduce the risk of robbery during drug transactions; however, the risk for exposure to unknown dangerous substances is significantly higher.
The hope among darknet drug clients is that since darknet dealers value positive feedback on darknet markets they will not pass on lethal drugs to their clients. The reality is that the drugs are very dangerous. They come from unknown origins and are made without any regulation. Of course, non-virtual drug markets have the same issues in regard to drug quality; however, the darknet allows for purchases of higher quantities of exotic drugs than a “normal” local dealer.
No honor among thieves
The originating location for synthetic drugs and opiates is often overseas. The composition and quality of these drugs constantly change. With no geographic or social nexus between the customer and the dealer, the incentive for a dealer not to overdose their customers with a bad dose is reduced to a negative review online. Additionally, the ability for a dealer or other customers to safely notify other customers about a bad dose is reduced.
The disconnect between customer and dealer makes it difficult for law enforcement and public health officials to quickly track and mitigate the threat from a bad dose.
Think globally, act locally
With bitcoin and other crypto-currencies, large amounts of money can cross borders in a second with very little record. The marriage of the darknet and cryptocurrency has led to ample opportunity for growth in criminal activity. The potential for laundering money, funding terrorism, buying child pornography, selling stolen goods, ordering a hitman or a kilo of fentanyl is limitless.
Enterprising law enforcement agencies need to consider the darknet as a vector for crime when conducting investigations and planning for the future.
Law enforcement leaders need to ask themselves questions like:
- Should the theft of bitcoin be considered larceny?
- How are we going to seize crypto-currencies?
- Where are criminals selling stolen goods?
- Are we seeing an increase in postal-related drug cases?
Law enforcement agencies must cooperate at every level to successfully investigate darknet crime. Just as there are opportunities for criminal activity in the darknet, there are opportunities for enforcement and investigation for proactive police departments.
Training is key
The first step to successfully investigating darknet crime is to seek training.
In 2014, before there were many options in terms of law enforcement training for the darknet and digital currency, a representative from the Association of Certified Fraud Examiners created a class for local law enforcement investigators in the northern Virginia area.
This class helped open the eyes of investigators to the potential of the darknet while providing great technical detail about the inner workings of the darknet and digital currency.
Since that time, HSI and FinCEN have begun to fill that need with their own training courses.
Network with partners
After educating your agency, law enforcement leaders need to network with state, local and federal partners. This will help prevent duplication of effort, allow for opportunities to share resources and intelligence, and will also provide opportunities to brainstorm and learn from the mistakes of others.
For example, networking with your local U.S. Postal Inspection Service group is incredibly valuable for darknet investigations. At some point during a darknet investigation, you will need their help due to the likelihood of darknet-related packages being sent via U.S. mail. Postal inspectors are a valuable resource and offer another avenue of intelligence gathering.
Networking will also make it easier for inter-agency target deconfliction when you get your investigations up and running. In the words of one of my now-retired commanders, deconflict up, down and sideways.
Put it in writing
During those networking meetings, leaders should ask about other agencies’ policies in regard to:
- How they handle access to the darknet;
- How they handle funds kept in digital currencies;
- How they audit digital currency funds.
Failure to implement proper controls and policies prior to implementing proactive efforts on the darknet is a recipe for disaster. Two agents who worked on the Silk Road investigation are accused of embezzling over $800,000 worth of bitcoin. The agents took advantage of a lack of internal controls to help them embezzle the funds.
The technical aspect of darknet investigations may be intimidating for the uninitiated, but it is imperative that supervisors and commanders learn enough to confidently manage those investigations.
Start your cases
To avoid educating suspects about law enforcement tactics this article will not cover the specifics of darknet investigations. However, once you start your cases, make sure you continue to network and adjust your tactics.
Law enforcement is often behind the criminals in terms of technology, so don’t be afraid to try different tactics and adapt to crime trends.
Final thought
While the corner drug market will never disappear, law enforcement agencies must be prepared to investigate all vectors of drug trafficking. The darknet and cryptocurrencies are a part of modern drug trafficking and overall criminal activity. Don’t let this technology be a blind spot for your agency.
