LP Magazine

JUL-AUG 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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UNRAVELING THE MYSTERY OF THE DARK WEB 43 LP MAGAZINE | JULY‚ÄďAUGUST 2019 online black markets such as Silk Road and AlphaBay, which was shut down in 2017. Though Ulbricht claimed to have founded Silk Road based on the libertarian ideal of a completely free market, Silk Road was best known as a platform for selling illegal drugs. The FBI investigation and subsequent shutdown of Silk Road gained global attention. The story of Silk Road's rise and fall essentially drove the dark web to become what it is today: a hotbed of online black markets. These "cryptomarkets," along with copycat sites that began appearing after people learned about how lucrative this business was, typically look like any other online marketplace, like eBay. The sites have usernames and verified sellers, even customer feedback and seller ratings and reviews. Users can track their orders and interact with customer service agents, just like they can with any other online retailer. Setting up a cryptomarket does not require a high degree of technological experience. Like e-commerce sites on the surface web, templates exist for dark web sites as well, which means that anyone can easily start selling on the dark web. These sites even sort illicit goods into categories such as fraud, drugs, counterfeit items, weapons, software and malware, stolen credit card and financial information, and stolen personal identifying information, which often have specific search controls to allow potential buyers to search the listings by location, social security number, birth year, credit limit, and much more. After his arrest in 2013, Ulbricht was convicted of money laundering, computer hacking, conspiracy to traffic fraudulent identity documents, and conspiracy to traffic narcotics by means of the Internet. He is currently serving two life sentences without the possibility of parole. Many people have criticized the FBI for its dubious methods of investigating and arresting Ulbricht, even going as far as to accuse the FBI of entrapment. However, Ulbricht was clearly guilty of his crimes. Despite having created Silk Road with possibly good intent, he eventually got caught up in the greed of monetizing the platform, which is what actually led to his arrest. Unlike Ulbricht, the founder of AlphaBay, Alexandre Cazes, created his online black market in 2014 with the specific goal of creating the "largest eBay-style underworld marketplace," a claim he made on the AlphaBay website. Through AlphaBay, Cazes made over $23 million in revenue and lived in luxury in Thailand where he owned many mansions and even had multiple wives. He was arrested in 2017 and found dead of apparent suicide in his jail cell in Thailand days later. AlphaBay was officially shut down a few days later. How People Pay on the Dark Web The leading form of payment on the dark web is cryptocurrency, with Bitcoin being the most common type of cryptocurrency exchanged. Cryptocurrency is a digital currency, where transactions are recording on a public ledger, usually a blockchain, and every process is protected by cryptography, which is simply the practice of secure communication. People on the dark web use cryptocurrency because it is decentralized, digital, and almost completely anonymous. No banks or governments can control cryptocurrency. Instead, cryptocurrency is controlled by its users and a blockchain to maintain its integrity. As a digital currency, cryptocurrency can be instantly exchanged online without needing a physical representation of its value, such as paper money. Cryptocurrency is a pseudo-anonymous system. Although it is impossible to trace transactions back to their senders or recipients because the blockchain only has a record of each user's public identity, you could theoretically find out a user's identity if you had the private key to their account. When users purchase goods on the dark web, such as drugs, they usually transfer cryptocurrency to be stored in escrow, just like someone does when they buy a house. The cryptocurrency sits in escrow until the buyer confirms they have received their order. This prevents sellers from ripping off buyers. However, sellers on the dark web don't often try to rip people off. To them, the dark web is simply another method of delivery for products they have already been selling. Though they are criminals, these sellers operate just like typical businesspeople. They are motivated by money, which is what keeps them honest. This incentivizes them to sell high-quality products and provide good customer service in order to entice buyers to return. Sellers on the dark web provide customer support the same way as many other e-commerce retailers by These "cryptomarkets," along with copycat sites that began appearing after people learned about how lucrative this business was, typically look like any other online marketplace, like eBay. The sites have usernames and verified sellers, even customer feedback and seller ratings and reviews.

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