China’s State Hackers Operate On The Darknet

keyboard_chinese_flag-100525260-primary.idgeThe Chief Information Security Officer for a Californian-based firm, DBI, which specializes in gathering intelligent information about criminal activities on the Darknet, has announced the existence of secretive marketplaces run by Chinese online spies. Ed Alexander said in a phone interview that these Darknet portals are where most of China’s state hackers do their part-time job, and then sell stolen information to the highest bidders. He stated that their primary allegiance is to China, apart from themselves.

DBI trains and administers Darknet investigators-for-hire who perform human intelligence operations (HUMINT) on the Darknet, with Alexander overseeing some of the world’s largest CyberHUMINT groups. Despite reports saying that China’s state hackers are sluggish and not well skilled, Ed begs to differ with this opinion. Instead maintaining they are the most technical people he has ever come across in his 10 years since running CyberHUMINT operations. Even hackers from other nations, such as Syrian Electronic Army, do not match their level of expertise.

There are two parts of the Internet that people use today, the most popular one which can be accessed by anybody is called Surface Net or Clearnet. It includes all sections of the web that are available on search engines. However, a more concealed side is also in existence known as Deep Web. It makes up 94% of all Internet activity including data which standard search engines cannot search.

Further within the Deep Web, there are hidden sites that can only be reached through specialized tools like the Tor browser; this part of the Internet is the Darknet. While there are few legit websites operating here, there are also online black market sites such as the now defunct Silk Road marketplace. However, DBI deals with an even deeper portion of the Darknet where it gathers intelligence information from private forums where real underground Darknet criminals conduct their business here.

 

DBI’s approach to investigating cybercrime is different from other intelligence gathering startups, most of which only retrieve data off from open Darknet forums. Moreover, DBI is currently the only company providing Cyber-HUMINT services for hire. With operatives already employed by Fortune 500 companies, military, law enforcement and intelligence networks worldwide.

Alexander compared the Darknet setting to that of a gang operating within the prison ecosystem. New entrants are not considered part of these gangs, but rather just outsiders peeking around. They remain oblivious to discussions taking place amongst organizations running the act. He further stated that DBI has the technology to see discussions targeting state and business networks, including data that has already been breached by hackers and sold to online bidders.

In China’s Darknet environment, public discussion forums are mostly used by less experienced hackers. The state hackers work on difficult to access marketplaces. Alexander said that these data thieves are state sponsored since some of them have divulged this information to his operatives.

10-most-notorious-hackers-of-all-time-400x282The state hackers use a 3-step, invites-only Darknet marketplace where users follow a laid down procedure before accessing the site. Interested prospective members must first be recommended by a known member, and then approved by site admin. Next, he should be backed by at least 5 trusted Darknet citizens of high status. Finally, every individual must prove that they own at least $100,000 worth of bitcoins in a virtual wallet and also demonstrate control over this particular account. It’s only after completing these steps that a new member can be allowed to shop and interact freely with other Darknet members.

Most data hacking clients are representatives from various countries around the world, with buyers sourced from international markets such as Russia and Iran. These Chinese Darknet hackers will sell their wares to any nation that has enough financial resources to purchase them, though they won’t conduct business with those working for terrorist organizations.

Stolen data can cost anywhere up to $75,000 depending on its significance, while access to a state or business network might reach even prices of $100,000. Additionally, if a client wants to hire hackers for a specific target they charge in excesses of $1 million. The CISO head further confirmed that most Chinese hackers run their Darknet activities as side projects.

Identabit: The Opposite Of Bitcoin

Introduction

Perhaps the strongest thing about Bitcoin transactions is its anonymity. This is because transaction verification does not happen through checking identities but via a complex algorithm. But this very aspect of Bitcoin is what has endeared it to criminals and underground market dealers. In the process, this has earned it the wrath financial regulators and government officials.

Enter Identabit

An Australian-based has announced plans to introduce a digital currency called Identabit that will allow regulatory acceptance by means of user association. Called Thinking Active, the startup categorizes Identabit as the first decentralized identity-ensured currency. Identabit represents a means of liberating decentralized currencies and many are already saying that this will be the ultimate Bitcoin replacement.

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Identabit was borne out of collaboration between Cryptonomex and Thinking Active. Cryptonomex is a Virginia-based firm led by Dan Larimer while Thinking Active is owned by John Underwood, a New York-based software entrepreneur. Larimer has been identified as one of the brains behind Blockchain 2.0 project, BitShares.

Bitcoin Plus Identities

Bitcoin is a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009.

Despite the closure of Silk Road and increased attention on Bitcoin transaction that may involve criminal transactions, digital currencies are still being rampantly used in ransomware attacks by hackers. As a result, it has made it all the more difficult for government authorities to trace payments, something that has led to most governments to be skeptical about Bitcoin.

Although the underlying technology known as Blockchain has tremendous potential in disrupting different industries given its more practical applications, government agencies seem hell-bent to suppress innovation with compliance. To offer something of a compromise, Identabit seeks to come up with another version of Bitcoin but one that is identity-based. This will allow the development of Identabit without the element of criminal activity.

Because Identabit is basically creating a permission-based ledger, it will not necessarily leave all transactions open to public scrutiny. Those behind Identabit claim that they are able to process 4x transactions of MasterCard and 6x transactions of Bitcoin network.

Is Identabit Superior to Bitcoin?

If the information from the Identabit website is anything to go by, Identabit meets counterterrorism and anti-money laundering acts. In other words, this makes it unusable for felons. It uses technology that makes it superior to Bitcoin in more ways than one. The technology that it uses is called DPos or Delegated Proof of Stake and it’s a fairly new technology. This has given it a transaction capacity that exceeds that of MasterCard, while the transaction capacity of Bitcoin is a meager 0.035 of MasterCard’s. Similarly, Bitcoin has a big disadvantage in that once the money is transferred, it cannot be recovered.

However, since Identabit requires that the identities of both parties be revealed, it enables disputing of transfers as well as recovery. This is because of the plenty of digital proof. In some ways, Identabit is more preferable and also more secure compared to Bitcoin.

How Will Identabit Introduction affect the Deep Web?

At the start, people seemed to be quite taken with the novelty of anonymous and safe currency such as Bitcoin. However, due to the public bashing that Bitcoin received, more people don’t want anything to do with this anonymous currency. Identabit seems to be the answer and has tapped into the fear of law enforcement by the public. It’s a privacy minded digital currency that also complies with all elements of the law. Looking at the wider scope of things, it spells trouble for darknet markets.

A theory has been advanced to the effect that majority of people who buy drugs on darknet markets like Silk Road don’t do so primarily because they need drugs or other illegal items. Rather, they do this for the novelty of online drug trade.

Bitcoin is a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009.
It’s possible that these people initially bought into the Bitcoin concept and then began to explore more ways of spending their newly acquired currency. The deep web almost always pops up when people search for Bitcoin, something that tempts people to explore about it a bit more. This might mean that a user eventually ends up at Abraxas or other markets, whereupon they will be overawed by the sheer fact that places like that even exist.

Instead of just window shop, a user is stimulated to purchase the goods by the ease of buying unlawful goods and the relative safety. But given that Bitcoin popularity has been under steady decline, coupled with heightened vigilance from law enforcement, darknet markets have been gradually losing customers and revenue. It is possible that the exit scams that many successful darknet markets committed were not simply to get customers enraged but to get out of business fast before Interpol catches up with them and before Bitcoin value comes down crashing.

The net effect is that the deep web will eventually experience a slow decline and a remarkable decrease in their user bases. Bitcoin is simply not the place to rake in the money anymore. The ever decreasing interest in Bitcoin is a major concern for deep web, no doubt.

Identabit will usher in a new era of cryptocurrency, and in the process it will devalue as well as stigmatize the Bitcoin. It is sad to say but the Bitcoin that all of us loved might be sliding quickly into oblivion.

The Deep Web And The Darknet Hidden Services

It seems like only yesterday when most people where browsing the internet, blissfully unaware of what is happening underneath its surface. Then the media realized there is an interesting story to be told there and thus series like House of Cards was created, followed by an “in-depth” story on the Deep Web and Silk Road’s downfall.

What this did is create an unnecessary confusion over the terms “Deep Web” and “Darknet”(or Dark Net) and the things these terms represent. The mistake here was the use of said terms interchangeably, probably caused by the lack of research done on their history.

The term “Deep Web” was actually coined by Mike Bergman and the company Bright Planet as a name for unindexed part of the web. To understand this better one would first need to understand the way in which search engines look for content. For a search engine like Google or Yahoo any content not connected to something via a link is practically non-existent. This includes dynamically created pages like, a Gmail account or information you need to use the site’s search box (which search engines cannot do) to find. This being said, it is clear that about 96% of the web can in fact be considered “Deep Web”.

deep webThe misconception was created when people wrongfully started using the term “Deep Web” to describe what is known as “Darknet”. The difference here lies in the fact that while Deep Web is unindexed due to technical inabilities of a search engine, the content on the darknet is purposefully hidden from the surface net. While there are numerous ways to hide content on web, the one most commonly used by users is through the use of Tor or The Onion Router.

This is specialized software used to access sites with hidden content which can be recognized by having an “.onion” suffix in the URL. It was first created by the US Navy as a way to encrypt data and increase anonymity, but since all the data was sent from the US Navy and to US Navy the project was abandoned and shared with the public due to obvious lack of practicality. The way Tor works is by having a network of computers become “nodes” through which users are rerouted when making a search query. This makes their IP change every time it jumps from node to node making it increasingly difficult to track. While this system is very strong it still has its vulnerabilities and should not be takes as completely untraceable. The main thing to note about browsing the darknet with Tor is that it differs from conventional Internet browsing. Since it is unindexed, you cannot type the name of the web page in the browser and hope to get a list of pages that match your query. Instead, you need to have the link to the page given to you by somebody who already visited the site in order to be able to enter it. There is no comprehensive index of websites residing on the deep web. Some have built small lists of deep web links.

This system however opens the possibility for a whole new world, or rather “underworld” on the internet. By creating special randomized URL’s that can only be read by Tor, a completely different community has appeared fueled by anonymity. Any black-market good from stolen credit card information to firearms and drugs can be found on the darknet. Another thing that became synonymous with it was “hacking” or rather “cracking” for those who have term preferences. The anonymity that the darknet has to offer makes it a haven for those looking to offer their “technical knowledge” as a service, but also those praying on less tech-savvy people, looking to relieve them of their credit card and personal information.

tor browserThe most common places where one could find illegal goods being marketed are the darknet markets. After the downfall of the biggest and most notorious online black market, the Silk Road, many new contestants began to battle for the top place. In the upcoming period hundreds of marketplaces where created and brought down continuously, mainly due to newly found mistrust in the safety of Tor and darknet in general. One other thing that this created was the rise of false marketplaces and opportunities for scammers. The most notorious story one will hear on the darknet is the one revolving around the Evolution marketplace’s exit scam. The owners of said site created a stable community and were one of the prime contenders to replace Silk Road before closing the site and disappearing with $12 million of their customer’s Bitcoins. After this incident the darknet market community was severely shaken, but despite that it still remains functional on sites like AlphaBay, Agora, and Nucleus.

Another thing to keep in mind is that there are some sites on the darknet that contain child pornography and other disturbing content. This is the one major downfall with the darknet because while it gives a place for free thinkers, political activists, drug users and anyone else that cherishes their privacy, a place to be open and free it does also give the same liberties to the sick and twisted scum of the earth pedophile’s.

With all the illegal actions taking place and questionable content being posted on the darknet, it is easy to forget the good sides of such a place. For example it offers a possibility for uncensored freedom of speech for countries where governments are stricter regarding their media. It also offers a safe place for people to exchange information and stories with the media and between each other, anonymously.

To summarize, the difference between Deep Web and Darknet, while not too big still exists and lies within their scope. The Deep web is the entire wealth of information unindexed by search engines for one reason or another. The Darknet however, is actually a small fragment of the Deep Web, artificially hidden from the search engines and usually connected to illegal actions.

While both Deep Web and Darknet terms are relatively new and still evolving, it is important to use them properly now more than ever to raise technical awareness of the public and avoid misinformation as much as possible.

AlphaBay: One Of The Top Darknet Markets

One of the largest marketplaces on Deep Web, AlphaBay, was and still is a heaven-like place for those looking to buy or sell black market goods. AlphaBay was founded right before the Evolution market controversy and has had a huge growth spurt, partially due to that incident. Being founded by a well-known carder and carding forums member, alpha02, the AlphaBay has a good reputation in the deep web community.

AlphaBay-Home

AlphaBay is what one would consider a classic marketplace-type website. It has its own categories and two distinct groups of users, buyers and vendors. What separates the AlphaBay from its competitors is the increased security levels implemented on the site. In an interview for deepdotweb.com, the founder of AlphaBay explained the security features presently put up on the site and what how they affect the overall security. This being said, one would find the amount of scam accusations on forums, relatively high. If one visits AlphaBay sub-reddit they will encounter a pretty much 50/50 mix of positive and negative reviews about their experiences on the site.

This should not discourage potential users, because of the fact that while AlphaBay has, until now, proven to be very reliable there is a huge number of scamming sites on deep web praying on new users and their credentials. Approximately 80% of all negative, scam-related post’s directed towards AlphaBay and their business policy can be pinned down to new users being phished out of their credit and account information and ultimately bitcoins. It is important for this reason that one uses different passwords on every website they sign in and look into learning to use 2FA and Multisig transactions before conducting any business on deep web in general.

If we exclude potential outside threats, AlphaBay does seem to take extra care about their security. After following the onion link, one will be directed to what seems to be, their custom captcha verification page. While not being too important in the overall security, it helps prevent DDoS attacks and spam-bots to some extent, making the site’s uptime a quite commendable 97.4%. The site itself is also custom-coded which, while being a common feature on deep web still increases security.

All transactions are done in bitcoins to ensure user’s anonymity and there are several layers of transaction protection present on the AlphaBay site. The withdrawal PIN, vendor bond and forced vendor PGP are constantly up and operational and the site also supports 2FA and Multisig transactions making it one of the most security-heavy on deep web.

There are multiple categories on the site, with firearms drugs and stolen credit card information being permitted for offering. There are close to 20, 000 entries currently available on the site and surprisingly, not much of them are drug listings. Compared to other marketplaces the ratio of drug listings to total listings is much lower, but that does not mean that the quality of the merchandise or service is bad. As it stands, some of the most well-reputed vendors have their shops set up exclusively on AlphaBay. Unfortunately, with so many vendors there is also a large amount of scammers present, but those can generally be found out easily, by looking at the reviews that buyer’s post about the level of satisfaction to the service they received and generally sticking to tried and proven vendors.

AlphaBay Drugs

While the entire site is accessible only on the deep web, AlphaBay is one of the rare darknet markets that openly market themselves on Clearnet. They have a single page website set up with directions to their darknet market and a sub-reddit forum actively moderated by alpha02 himself and his moderators. The moderators of AlphaBay were known to be very prompt and quick to respond to disputes, but as of recently, more and more posts are appearing criticizing their ‘lack of care’ for their users’ problems.

There are recent rumors circling the forums that AlphaBay may have started to show symptoms of exit scam preparation, but none are conclusive and for now, there does not seem to be an immediate threat of exit scam being planned. There are also plans of cooperation with Russian deep web community in order to establish a mutually productive partnership and increase the market, but as of now no concrete action was taken in this direction.

All in all, while the Evolution exit scam has left everybody’s trust in darknet markets shaken; AlphaBay seems like a good place to do your business. With a little bit of research on protecting your account info from theft and the use of common sense, one can purchase and sell from this site without the need to worry about its owners and their hidden plans.