Dark web criminal activities are frequent, and Crypto Assets have become the main payment tool.

With the emergence and development of Crypto Assets, their high degree of confidentiality and cross-border characteristics have made them the preferred tool for cybercriminals. Undoubtedly, the dark web has become one of the largest application scenarios for Crypto Assets.

In 2013, the dark web platform "Silk Road," once referred to as the "dark version of e-commerce," was shut down by law enforcement. However, this did not stop the development of the dark web. On the contrary, the scale and number of dark web markets saw a counter-trend growth. According to statistics from a certain data platform, dark web market activity doubled in 2020 compared to 2019.

In April 2020, media reported that 530,000 accounts and passwords from a certain video conferencing platform were being publicly sold on the dark web. These accounts came from well-known institutions, with each account priced at only 0.002 cents. Investigations revealed that these accounts might have been obtained through credential stuffing attacks, indicating shortcomings in the platform's user data protection.

In traditional dark web transactions, the flow of funds has always been a key issue. However, the emergence of Crypto Assets has changed this situation. According to statistics, Bitcoin alone has set a trading record of over $1 billion in the dark web market within a year. Besides Bitcoin, other Crypto Assets such as Monero, Litecoin, Dash, and Ethereum also frequently appear in illegal transactions.

In recent years, multiple large-scale data breach incidents have been related to dark web transactions. In March 2020, data from 538 million users of a major social platform was leaked and sold on the dark web. In February 2019, a seller on a certain dark web market sold information of 620 million users, with transactions conducted via Bitcoin. In August 2018, 500 million pieces of check-in data from a hotel group were sold on the dark web for 370,000 yuan.

The reason why Crypto Assets are favored by the dark web is mainly because they do not require the involvement of third-party financial institutions, allowing for convenient and highly anonymous transactions. Different Crypto Assets have their own characteristics, such as Litecoin with low transaction costs, Monero with stronger privacy, and Dash which enhances anonymity through mixing technology.

Hackers commonly use methods such as utilizing digital currency exchange services to convert Crypto Assets into intermediary currencies like online game currency, and then into fiat currency. They will use mixing services to disperse funds into smaller amounts, extending the time interval between transactions, and finally consolidating the funds. However, there are risks in the consolidation phase, as exchanges and third parties monitor for abnormal transactions.

As criminal activities on the dark web become increasingly rampant, experts predict that 2020 will be the year of decentralized crime. Criminal activities may shift to new decentralized platforms, such as instant messaging tools like Telegram and Signal. Some criminal organizations have even brought in Crypto Assets experts to provide advice on combining Crypto Assets with fraud, money laundering, and other illegal activities.

To address these challenges, a corresponding regulatory system needs to be established:

1. Use the KYT (Know Your Transaction) feature to identify suspicious trading activities.
2. Strengthen multi-party cooperation, including enterprises, regulatory agencies, law enforcement departments, and exchanges, to jointly combat crime.
3. Promote international cooperation and establish a transnational regulatory system.
4. Play the role of a security company, assisting in identifying criminals and protecting user assets.

A security company has developed an anti-money laundering compliance and investigation system to assist law enforcement and regulatory agencies in investigating cases involving Crypto Assets. The company has participated in over 40 related case investigations domestically, providing key evidence to public security authorities.

There are two perspectives on dark web crime. Pessimists believe that technology has become a tool for crime, while optimists think that we should learn from it and use these technologies for the benefit of the public.

Experts believe that adopting an indifferent attitude towards Crypto Assets crime is unwise. We should focus on their potential applications while also being vigilant about the risks they may bring. In the future, close international cooperation and effective use of technology will be key to achieving sound regulation. We need to promote the healthy development of Crypto Assets while preventing them from becoming a breeding ground for illegal activities and a disruptor of financial order.