While cryptocurrency has become the wheelhouse of tech bros and Ponzi scam artists, the notorious digital currency has even seedier roots the further back you look at its history.
Originally launched in January 2009 at a value of about US$0.0009 each, much of the world saw Bitcoin as an oddity, a novelty to be briefly amused by and then forgotten.
Organised crime and its customers were the exception.
Now, one Australian law enforcement officer is undertaking a project with the Donald Mackay Churchill Fellowship to develop better methodology to counter and disrupt organised crime’s use of cryptocurrencies and blockchain technology.
The dark side of the internet
At the same time blockchain technology was emerging, the dark web had existed for about nine years – an unregulated, unindexed, decentralised 'grey internet' that cannot be navigated by search engines but requires coded URLs and TOR-based web browsers to access.
You can think of the dark web as the VIP or underground rave section of the internet, accessible only to those already in the know or invited by those who are.
It’s completely legal, on the surface – anyone can download and use a TOR browser, create and market a website without consequence – but the anonymous, unregulated and decentralised nature of the dark web automatically lends itself to more sinister activities.
The Silk Road
One of the most infamous such websites on the dark web was the Silk Road.
Aptly named after the historical trade route that flowed from China, through the Middle East and into Europe, on the Silk Road you could get anything you wanted – quite literally anything.
Human trafficking, narcotics distribution and sale, hacked credentials, highly sensitive and illegal data, legitimate hitman services – all available on the Silk Road completely anonymously.
Of course, these things cost money. Often, a lot of money, the kind of money financial institutions take note of.
Enter; cryptocurrency – the almost foolproof and close to untraceable method of paying for illegal contraband.
The Silk Road operated essentially entirely via bitcoin and other cryptocurrencies until it was shut down in 2014 and its founder sentenced to life in prison.
While only one example of many such marketplaces on the dark web, it revealed just how effective decentralised technology can be in concealing and anonymising criminal activity.
Education, seizure and disruption
While law enforcement’s response to organised digital crime is often piecemeal, late and incoherent, international policing organisations have well and truly woken up to the threat cryptocurrency represents.
South Australia Police law enforcement officer Martin Burke has spent 34 years working in the digital currency arm of the South Australian Police’s Financial Crime Unit.
He has now accepted a fellowship from The Donald Mackay Churchill Trust through which Burke will learn from global leaders in understanding and combating crime facilitated by cryptocurrency in Ireland, the Netherlands, Poland and the United Kingdom.
“We are dealing with digital currency in a digital world yet the legislation and regulations are still based on tangible property,” said Burke.
“The cryptocurrency market is unpredictable and quickly evolving therefore it requires strong and adaptable legislation.”
He’ll be researching the best practice methodologies in cryptocurrency education, seizure and disruption as well as leading legislation and regulation to disrupt crypto-related crime and to seize cryptocurrency associated with crime.
“With the continual increase of cybercrime, Martin’s Fellowship is vitally important,” said Rachael Coghlan, CEO of the Churchill Trust.
“Understanding how cryptocurrency is used and exploited by serious crime, means we are better able to arm ourselves in the fight and protect everyday Australians from becoming victims.”