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Increased adoption and a string of legal victories could mean some dark days ahead for the world’s most popular cryptocurrency. According to a Twitter announcement made by the Israeli Police Force on May 7, it was confirmed that an investigation into several websites on the Dark Web has led to at least two arrests in the country.
The investigation, which was conducted as a collaboration between Israeli police and the United States Federal Bureau of Investigation (FBI), led to the discovery of two individuals who, according to a report on the Times of Israel, developed and operated a Bitcoin-backed darknet site known as Deep Dot Web.
Via Deep Dot Web, the men reportedly served as connectors between buyers and sellers of illicit materials. According to the local media report, Deep Dot Web helped in facilitating the sales of drugs, unlicensed ammunition, and much more.
A separate tweet by the Israeli police seemingly confirmed that speculation. In the thread, the police described the site as an affiliate marketing platform that got its operators a commission off of every sale that was made through it.
Continuing the description, the police confirmed, “The payment for the transactions was carried out using Bitcoin. The 2 suspects arrested in Israel will be brought before a judge for a hearing regarding their potential detention extension.”
Bitcoin for cybercriminals: a retrospective
The use of cryptocurrencies as payment methods by criminals on the dark Web is certainly nothing new.
These unsavory individuals have come to rely on the security and anonymity of Bitcoin– the same features that make the currency so popular to investors- to transfer funds from one place to another. In Bitcoin, these criminals have found the perfect means of conducting transactions without having to worry about tracking or regulatory oversight.
Multiple cases of fraud, money laundering, and terrorist financing which have been reported on the darknet have had one thing in common; cryptocurrencies, especially Bitcoin (BTC) as the financial processor.
As a matter of fact, digital assets have gotten so much of a bad rap for their involvement in Dark Web-related activities that this seems to be the most significant obstacle in the push by members of the legitimate crypto industry to achieve the full legitimization of cryptocurrencies.
Times could be changing
However, things seem to be changing within the illegal internet sector as well. In February 2018, cyber threat intelligence provider Recorded Future revealed in a survey report that numerous darknet organizations are beginning to move on from Bitcoin and are, in fact, looking for a new means of facilitating their payment.
In its report, the company claimed to have examined 150 online criminal forums, marketplaces, and service providers. According to the report, most of these criminal organizations have become dissatisfied with Bitcoin’s performance as a payment processor.
Most darknet criminals were reported to have complained about Bitcoin’s speed, usability, and security, attributing the lag to the growth in the currency’s prominence that has seen increased load being put on its blockchain.
As regards its transaction fees, the report claimed, “As a result, Bitcoin payments have become economically infeasible, because the subsequent cost of transaction increased ten-fold, sometimes as much as 30 percent of the smaller payment amounts.”
So, these criminals have begun looking for alternatives, and as the report claims, Litecoin (LTC) and Dash (DASH) are the two to take Bitcoin’s crown.
If anything, the latest arrest won’t serve Bitcoin’s appeal to cybercriminals. While we’re still unsure how these law enforcement organizations were able to apprehend Deep Dot Web’s operators, we know for a fact that the site was BTC-backed, and authorities couldn’t have made the arrests without looking through financial records.
So, here’s the problem; BTC is still the world’s most valuable and most popular crypto asset by a mile, but if cybercriminals- the same people who unwittingly helmed its rise to prominence- turn their backs on it, who knows what could happen?