With the Empire falling, who will take over the throne?

With the Empire falling, who will take over the throne?

Empire Market’s exit scam has dealt a significant blow to the cybercriminal community, begging the question of where the marketplace’s former users–so-called “Empire refugees”–might move to next. In this blog, Digital Shadows (now ReliaQuest) will compare the features of a selection of the marketplaces currently available to the cybercriminal community and ask why some might be more appealing. We will also explore the possibility that the marketplace model might be broken for good following recent exit scams and law enforcement seizures.

The potential candidates

This table includes a subset of the currently available dark web marketplaces assessed to be popular within the cybercriminal community. The highlighted features indicate factors that cybercriminals may consider when choosing a new market. Some of these were included in a guide published on the dark web community forum Dread covering desired features for a dark web marketplace. According to the guide, a good marketplace should have compulsory multisig and PGP verification and competitive vendor bond rates – terminologies covered in the definitions list below. We’ve also added a few more considerations that we think might play their part. 

Definitions:

• Multisig – Does the marketplace enforce multisig, a payment system in which multiple authorizations from different individuals must continue with cryptocurrency transactions? Multisig is considered to provide additional security during transactions.
• Forced PGP – Does the marketplace force its members to sign their communications using Pretty Good Privacy (PGP), an encryption method to prove the legitimacy of messages? PGP is used to reassure cybercriminals they communicate with the real owner of an account rather than an interloper. 
• 2FA – Does the market allow two-factor authentication for user accounts? 2FA provides added security. 
• Finalize Early – Does the market allow funds to be released before the vendor is satisfied with the transaction? This measure reduces the potential damage from fluctuations in the price of Bitcoin and increases the chance of falling victim to a scam. 
• Commission rates – How much commission does the marketplace earn from each transaction?
• Vendor bond – How much does it cost for a vendor to register and list offerings on the marketplace? Higher vendor bonds might put some sellers off but do reduce the chances of scammers registering.
• Access Platform – Which browser platform must be used to access the marketplace?
• Payment Methods – What types of cryptocurrencies are allowed for payment purposes? Bitcoin (BTC), Monero (XMR), Litecoin (LTC)

The table shows that Dark0de Reborn, Canada HQ, Monopoly Market, The Versus Project, and ToRReZ market fit the Dread guide’s criteria for their use of multisig and preventing the risk of exit scams like Empire. However, Icarus Market has at least three times the number of listings on each platform, with over 35,000 listings as of September 2020. This figure increased from 25,000 to 35,000 just in the space of the last month. Icarus also has above average commission rates and allows popular payment options: Bitcoin, Litecoin, and Monero. 

Monopoly and White House Market rate highly on their approach to security and their strict use of Monero, compare this to Empire which predominantly operated in Bitcoin but still accept limited use of Monero, and Litecoin in order to facilitate a larger user base. While any marketplace could exit scam, if the administrators implement reliable security methods and prioritize quality over quantity, there will be less potential profit and less incentive to deceive its audience in the long-run. On the other hand, Monopoly and White House Market can only boast 22,000 listings between them, despite having launched eight months before Icarus. Although the dark web community appreciates features that improve security and users’ anonymity, many cybercriminals will likely base their choice on the number of listings and vendors with the easiest payment option available, predominantly Bitcoin.

Dread’s discussions indicate the community already lacks trust in Icarus with rumors of a future exit scam already in full swing. One Dread user predicted: “They are going to exit very soon. Some vendors are complaining about their FE privilege deactivated for no reason…. They start gathering escrow money to soon lock it down and exit scam [sic]”. It is not uncommon for undercover representatives of rival marketplaces to create forum threads to spread fear, uncertainty, and doubt. The marketplace scene is incredibly competitive, Dread’s subdread dedicated to dark web marketplaces currently has over 28,000 subscribers and new marketplaces pop up every other week, so it goes to show that popularity results in more business and, ultimately, more money.

The definition of insanity is doing the same thing twice and expecting a different result

With all these competing factors to consider, plus the risk of yet another exit scam, you might be asking yourself why cybercriminals persevere with the marketplace format, especially with the availability of other platforms such as forums and encrypted communication applications (Telegram and Wickr). Several factors are explaining the continued existence of marketplaces in the current cybercriminal ecosystem.

• Are there any suitable forums?
  English-speaking cybercriminals do not have much choice other than to use English-language dark web marketplaces in many ways. They can’t turn to forums: The English-language forum scene as a whole is unstable and uninspiring. Forums that have the potential to attract a large user base of skilled threat actors often close before their time, as we saw recently with the closure of the cybercriminal forum Torum. Many of the more stable and long-standing English-language platforms, such as RaidForums, often lack appeal because a high proportion of the user base are considered to be inexperienced users, “script kiddies,” or scammers.
• Why not choose Russian platforms over English ones?
  In terms of forums, although English-speaking threat actors have increasingly turned to Russian-language cybercriminal forums in recent years—attracted, perhaps, by these sites’ longevity and credibility and the high value of the listings they host—many find these forums challenging to use. With the vast majority of the content in Russian, and machine translation software failing to cope well with forum slang and cybercrime jargon, English speakers often find it hard to follow conversations on Russian-language platforms. Usually, they are met with hostility from Russian-speaking threat actors; many even outright refuse to transact with English speakers. 

In terms of marketplaces, Hydra is the only well-known established Russian-language platform. Hydra has been active since 2015, and much like its forum cousins, it has stood the test of time when its English-language counterparts have fallen short. However, Hydra is not a viable alternative for Empire’s former user base. Hyrda marketplace vendors dispatch their products to secret locations around Russia, meaning buyers can only collect their products if they are based or willing to travel specifically to Russia. This measure likely prevents law enforcement tracking, which has led to the downfall of many an English-language market. In addition, marketplaces do not do well in the Russian-speaking underground scene. MarketMS, founded by the former administrator of Exploit (one of the most prestigious Russian-language forums), failed to make a single dollar before it folded in December 2019, and survived solely on the donations of supporters. If a market with such an impressive pedigree failed to make it, it is unlikely that others will succeed.

• How about switching to messaging applications?
  The other alternative to marketplaces is transacting via messaging platforms such as Telegram or Wickr or utilizing eCommerce platforms such as Shoppy or Selly. Yet, these also have their respective disadvantages. There are widespread fears about these platforms’ security: By trusting a legitimate third-party application’s encryption and anonymity policies, threat actors are placing their trust in non-criminal entities. Compare this to forums or marketplaces whose administrators have a vested interest in maintaining the ultimate security and anonymity levels. It is also often harder to market products or search for relevant listings on the disparate channels or groups that these messaging platforms provide, or advertise on the correct forums where the listings will get in front of the right audience. It is much easier to run a search on a marketplace or know that you can advertise your products to a market’s entire user base as a vendor.

Faced with the difficulties of using foreign-language platforms, in conjunction with the scarcity of English-language forums and the drawbacks of communication applications, many English-speaking cybercriminals see little choice than to register on new marketplaces that take the place of a recently closed one (and hope that history doesn’t repeat itself). As seen on Dread with user “Dreamvendor1990,” merely stating about Empire’s exit scam, “Red flags were always there, but i guess we got to get f***** by any market that can manage to stay online now lol.” New marketplaces also play on this; when they advertise themselves, they often reference exit scams and law enforcement takedowns that have occurred in the past, promote features, or make promises to ensure that such problems will not happen again a vendor or buyers opts to use their service. We also shouldn’t overlook the fact that marketplaces have numerous capabilities that alternatives do not offer:

• Marketplaces offer a fast and convenient user experience that can only be partially replicated on forums or messaging platforms.
• They offer centralized escrow services and early payment finalization options.
• Vendors know that they have a broad user base to which they can advertise their goods, increasing their chances of making a sale.
• Listings can often be purchased with a few simple clicks (compare this with a forum where interested buyers must engage in personal interactions with vendors to make a purchase). The clunky thread and post model is unappealing to many.
• Many marketplaces offer the ability to pay via multiple cryptocurrencies; users on forums or messaging platforms may only accept Bitcoin payment.
• Reviews of vendors provide some indication of a seller’s credibility and give some reassurance to buyers that they will not be scammed.
• Anonymity seems higher on marketplaces when compared with forums, in which content is usually viewable by all members, and researchers and law enforcement agencies can discern valuable identifying details.
• Forums often have strict rules and regulations governing how their members act on the site; marketplaces have none of this and provide an impersonal platform for buyers to be business-like and conduct transactions. Marketplace members do not have to live in fear of offending another forum member and being banned for one of their posts. 

Is history ready to repeat itself?

As we saw with the demise of AlphaBay, Hansa, and Dream Market, when a marketplace’s users are abandoned, they seek sanctuary in another platform. Could the recent explosion in the number of listings that Icarus market hosts indicate that the site is positioning itself to capitalize on the wealth likely to come it’s way? Especially if it attracts a substantial number of new joiners and then executes a text-book exit scam? Only time will tell.

Like all of us, cybercriminals tend to be creatures of habit. Suppose a marketplace demonstrates it has some security awareness but is also widely accessible through its use of popular cryptocurrencies, attracts top-level vendors, and provides active support to its user base. In that case, cybercriminals will likely forgo iron-clad security platforms with smaller numbers of vendors and listings in favor of moderately secure platforms with a large number of vendors and products, inevitably restarting the exit scam cycle once again.