The Truth About The Dark Web

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Tor network ("The Onion Router") originated from late 1990s US Department of Defense research to develop an anonymized and encrypted network to protect sensitive communications of US spies.
Tor is the underlying technology of the dark web: a collection of hidden sites inaccessible via a regular browser and not indexed by search engines.
The Tor browser—a free download—enables access to hidden .onion sites.
Purpose split: protect dissidents and privacy activists versus enabling illicit anonymity.

Over 65,000 unique URLs ending with .onion exist on the Tor network.
A 2018 study by Hyperion Gray catalogued about 10 percent of these sites and found most prevalent functions facilitate communication (forums, chat rooms, file and image hosts) and commerce (marketplaces).
A 2016 study by Terbium Labs analyzing 400 randomly selected .onion sites suggests that over half of all domains on the dark web are in fact legal.
Of the close to 200 domains catalogued as illegal by Terbium Labs, more than 75 percent appear to be marketplaces.

The dark web serves as a lifeline for individuals under oppressive regimes that block internet access or punish political dissent.
In freer societies it can be used for whistle-blowing, shielded communication, and privacy against corporate or government tracking.
Many organizations maintain a hidden Tor site, including major newspapers, Facebook, and the US Central Intelligence Agency, to facilitate secure communication.

Prevalent illicit activities include arms trafficking, drug dealing, sharing exploitative content (often involving children), and supporting extremist rhetoric.
Market offerings commonly include:
- Recreational and pharmaceutical drugs (most popular).
- Stolen and counterfeit documents such as identities, credit cards, and bank credentials.
- Hacking and technological crime services (malware, distributed denial of service attacks, hacking for hire).
- Pornography and counterfeit goods.
Cryptocurrencies (Bitcoin, Monero) have paired with Tor to facilitate illicit transactions.

Chainalysis report: Bitcoin transactions on the dark web grew from approximately $250 million in 2012 to $872 million in 2018.
Chainalysis projection: Bitcoin transactions on the dark web will reach more than $1 billion in 2019.
Chainalysis noted the proportion of Bitcoin transactions tied to illicit deals has declined by 6 percent since 2012 and now accounts for less than 1 percent of all Bitcoin activity.
United Nations estimate: amount of money laundered globally in one year is 2 to 5 percent of global GDP—between $1.6 trillion and $4 trillion.
Despite growth, the overall portion of worldwide commerce transacted on the dark web remains relatively small compared with global illicit commerce.

International cooperation has increased information sharing and technical capabilities to take down major illicit marketplaces.
During 2018–19, Interpol and the European Union brought together law enforcement agencies from 19 countries to identify 247 high-value targets and shared operational intelligence.
Outcomes from that cooperation in the referenced period: arrests and shutdowns of 50 illicit dark-web sites, including Wall Street Market and Valhalla.
FBI operations have reportedly allowed it to "de-anonymize" Tor servers by establishing nodes that reveal identities and locations of some illegal Tor-based webpages.
Silk Road 2.0 takedown details:
- Operated for two and a half years.
- Used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over 100,000 buyers.
- The site was used to launder hundreds of millions of dollars from unlawful transactions.
- The site had generated sales totaling more than 9.5 million in Bitcoin valued, at the time, at approximately $1.2 billion.
Successor marketplaces AlphaBay and Hansa market were shut down in 2017.
Dutch operation example: hijacked a leading dark web merchant, anonymously ran it for a month, then used collected information to disrupt dozens of other dark web merchants.

Financial Action Task Force (June 2019) issued guidance urging companies processing cryptocurrency transfers to identify both the sender and receiver of fund transfers.
G20 Summit (2018) recommended international regulatory agencies consider policy responses for crypto assets, particularly related to know your customer, anti–money laundering, and countering the financing of terrorism.
Observations on capacity and challenges:
- The start-up ecosystem of exchanges, wallets, and other crypto payment facilitators lacks necessary infrastructure to adopt financial-sector-like standards.
- Supervisors need to begin laying groundwork for enhanced scrutiny.
- The impending launch of Libra (Facebook’s cryptocurrency) will increase urgency by lowering barriers to adopting virtual assets for Facebook’s nearly 2 billion-plus users.

Core challenge: protect political dissidents, privacy advocates, and whistle-blowers while preventing child abuse, arms trafficking, drug distribution, and other illicit activities.
Effective responses noted:
- Improved information sharing among law enforcement agencies and financial institutions.
- Sharpened technical law enforcement capabilities to disrupt marketplaces.
- Regulation and oversight of cryptocurrency transfers to increase traceability.
Recommended stance: adopt a nuanced approach that thwarts illegal and immoral activities on the dark web while preserving the benefits of an anonymized network for legitimate users.

Aditi Kumar and Eric Rosenbach, "The Truth About The Dark Web," F&D Magazine, September 2019.

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