Pubdate: Thu, 13 Aug 2015
Source: Washington Post (DC)
Copyright: 2015 The Washington Post Company
Contact:  http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Author: Andrea Peterson
Page: A12

ILLEGAL ONLINE DRUG MARKETS FLOURISH DESPITE CRACKDOWNS

The government's war against online drug sales isn't working, 
according to researchers at Carnegie Mellon University.

Despite law enforcement crackdowns, online black markets for drugs 
have matured into a resilient criminal industry that enables more 
than $100 million worth of worldwide sales a year, according to a new 
paper from researcher Kyle Soska and computer science professor 
Nicolas Christin.

The report is one of the most comprehensive looks yet at the 
burgeoning online drug market. Researchers collected data on 35 
online marketplaces that were active on the "Dark Web" - sites that 
require the anonymous browsing tool Tor to access and are much harder 
for law enforcement to track - between 2013 and January 2015. They 
wrote a program to scrape the sites for data, including examining the 
price that drugs - from marijuana to cocaine - were being sold for. 
They also collected information on how much feedback sellers received 
from customers on their purchases. All of this data helped the 
researchers estimate trends and total sales.

The report was presented Wednesday at a Usenix conference in Washington.

The researchers found that the industry's growth has slowed since the 
early days of Silk Road-one of the first online drug markets and the 
target of an aggressive government investigation that resulted in a 
life sentence for the man convicted of running it. But sales continue 
to grow and the market has matured beyond being dominated by a single 
player, they said.

When the government closed Silk Road in the fall of 2013, the online 
drug business just migrated to other sites, including Sheep 
Marketplace and Black Market Reloaded, according to the researchers. 
Those two sites closed not long afterward, causing "quite a bit of 
turmoil" in the online drug scene, they said.

But another crop of sites eventually stepped in to fill the void, 
including Silk Road 2.0, Agora, Pandora and Evolution, and the market 
began to mature. When some of those sites suffered from big scams or 
government takedowns, the researchers say, the market had stabilized 
enough that sellers could just jump to another site.

For instance, when Operation Onymous, a joint U.S. and European 
crackdown that resulted in 17 arrests, shut down Silk Road 2.0 and 
some smaller marketplaces in November, the researchers said there was 
an initial drop in total sales, but the market immediately rebounded 
as people moved to competing markets.

Illegal online drug sales have stabilized at between $300,000 to 
$500,000 a day, the researchers said.

Marijuana and ecstasy were the most popular drugs among black-market 
users, according to the report, accounting for more than half of 
overall sales. The popularity of cocaine has fallen in recent years, 
while prescription drug sales climbed.

And the report found that the majority of vendors on the sites 
appeared to be small-time sellers. About 70 percent of them never 
sold more than $1,000 worth of products and 18 percent sold between 
$1,000 and $10,000. Just 2 percent managed to sell more than $100,000 
worth of drugs.

The researchers also noted an increase in technical sophistication of 
sellers on the markets, possibly in response to the government 
crackdown. Almost all sellers now allow buyers to contact them using 
strong encryption that secures messages so only the sender and 
receiver can unlock it, an uptick from the two-thirds of sellers who 
offered such security during the original Silk Road era, according to 
the report.

Overall, the Carnegie Mellon researchers argued their findings 
suggest that going after these markets is a cat-and-mouse game law 
enforcement may not be able to win.

But it seems unlikely that the government will change tactics. "Those 
looking to follow in the footsteps of alleged cybercriminals should 
understand that we will return as many times as necessary to shut 
down noxious online criminal bazaars," Manhattan U.S. Attorney Preet 
Bharara said in a statement late last year after a government 
crackdown on Silk Road 2.0. "We don't get tired."
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MAP posted-by: Jay Bergstrom