Shining a light. on the Darknet

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SHINING A LIGHT ON THE DARKNET Shining a light on the Darknet The Darknet is growing at a phenomenal pace. World Trademark Review dives into the murky depths to investigate the risks for brand owners It
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SHINING A LIGHT ON THE DARKNET Shining a light on the Darknet The Darknet is growing at a phenomenal pace. World Trademark Review dives into the murky depths to investigate the risks for brand owners It has been variously described as the lurid underbelly of the Internet and a dangerous underground marketplace for cybercriminals. Former National Security Agency (NSA) contractor Edward Snowden used it to leak thousands of pages of classified documents, and the Russian government has offered a sizeable reward for anyone who can trace its users. Despite all this, the ominous-sounding yet somewhat misunderstood Darknet is growing in popularity at a startling rate, and trademark counsel should thus seriously consider adding it to their enforcement radar. The Darknet has existed for over a decade, but it was last year s Federal Bureau of Investigation shutdown of the notorious Silk Road marketplace that really thrust it into the global spotlight. It was quickly condemned as a shady space where criminals could buy drugs, weapons and even hire assassins. But although these less savoury elements are undeniably present, the Darknet also has its positives. For example, the anonymity it affords to users enables political activists in oppressed countries to organise protests with some degree of safety, as happened during the Arab Spring in 2012; while the Darknet has 12 OCTOBER/NOVEMBER 2014 AUTHOR: TIM LINCE also helped citizens in countries with draconian internet regulations to circumvent web censorship. DeepDotWeb.com is one of the leading websites for Darknet-related information and developments. A spokesperson distils the concept in simple terms: The Darknet is simply a technology that provides anonymity and, like any technology, it can be used for better or worse, since when you create anonymity there is no middle ground either everyone is anonymous or no one is anonymous. Perhaps ironically, the Darknet s very existence is the direct result of US government sponsorship. In 2002 the US Naval Research Laboratory released an alpha version of Tor, the software used to access the Darknet, which was originally designed to hide the locations and IP addresses of US military operatives. However, the open source release meant that anyone could download and use Tor, and over the years the software has become easier for the average internet user to install (eg, the Tor Browser, which is continually being refined, is a modified version of the Firefox browser). Nowadays, the usage of the Darknet technology SHINING A LIGHT ON THE DARKNET is very easy: just install a browser and you are ready to go, explains the DeepDotWeb spokesperson. So it s obviously not hard to access. But as to whether the Darknet is a scary part of the Internet Well, as with anywhere that provides complete anonymity, people feel more comfortable doing things that they wouldn t dare do otherwise, so it s a good idea to do your research in advance to make sure you don t come across anything on the Darknet that you wouldn t want to. Indeed, preparation appears to be the key to the Darknet. The user experience has been described as a major pain in the ass, with slow load times (as data is routed and redirected around the globe) and the lack of a properly indexed search engine proving frustrating for many of those accustomed to the speed and convenience of the surface net. Furthermore, the.onion domains used on the Darknet are hashes of information rather than easy-to-remember URLs; and there is also the need to get to grips with Bitcoin, the anonymous digital currency used for most trade on the Darknet (and with little-to-no regulation, transactions are near-impossible to track). The evolution of the Darknet Yet despite these inconveniences, the Darknet continues to grow. The exact number of active users is difficult, if not impossible, to quantify. However, recent research offers a clue to its scale: the Tor browser was downloaded a staggering 120 million times in the last 12 months, with 2 million users from 110 countries accessing the Darknet every day. Meanwhile, the first major effort to curb illicit activities the closure of the Silk Road marketplace in October 2013 actually appears to have had the opposite effect. DeepDotWeb conducted research in the aftermath of the closure which revealed that the number of Darknet marketplaces has grown from just three to four before the Silk Road shutdown to between 35 and 40 today. The number of products on these marketplaces has also increased exponentially. In February 2013 around 18,000 products were listed; just over a year later, in April 2014, this had skyrocketed to 40,000 in the top 11 marketplaces alone (with the remaining smaller marketplaces omitted from the figures). It is a certainty that this number is even higher today. The Darknet is growing very, very fast and the closure of Silk Road seems to have had no impact on illicit activity there, confirms Bharat Dube, chief executive of online brand protection firm Strategic IP Information, who spends much of his time investigating brand infringement on the Darknet. The Darknet today looks like the Internet of the 1990s; but the minute it becomes equivalent to a second or even third-generation internet experience, it will become a real problem for brand owners. If it becomes a cool thing for people especially teenagers to access the Darknet, the problem will increase exponentially Recent news stories, including Snowden s NSA revelations and increasing concerns around privacy on social media websites, have encouraged a growing audience to seek refuge in a more anonymous environment. If it becomes a cool thing for people especially teenagers to access the Darknet, the problem will increase exponentially, continues Dube. It s not absurd to think that it could become trendy for young people to use Tor instead of the surface web to communicate or access websites. History suggests there s a high probability that Tor will become trendy, much as downloading songs was a social trend that became acceptable criminal behaviour, agrees Harley Lewin, a partner at McCarter & English with more than 40 years of experience in the trademark protection industry. He predicts that Darknet growth will be fuelled by continued incursions from both governments and web titans such as Google and VOCABULARY The following are some of the commonly used words and acronyms that brand owners should know before venturing onto the Darknet. Altcoin: Any crypto-currency other than Bitcoin (eg, Dogecoin, Litecoin and Namecoin). Bergie web: The level of the Internet that lies between the surface web and the Darknet. Peer-to-peer file-sharing networks and surface websites that provide information about the Darknet and pornography are part of this level. Bitcoin: The currency most commonly used on the Darknet. Also referred to as BTC. At the time of publication, one Bitcoin was worth $527. Clearnet/surface web: The regular Internet. Crypto-currency: A digital or virtual currency that uses cryptography for security and is notoriously difficult to track because of the absence of regulation. Deep web: Synonymous with Darknet. Honeypot: A website on the Darknet or surface net set-up by law enforcement to attract and trap people participating in illegal activities..onion : The Darknet uses onion routing, a technique for allowing anonymous communication over a computer network. This means that website addresses on the Darknet end in.onion (instead of the usual top-level domains). In turn,.onion web addresses tend to be randomly generated letters and numbers because they are a hash of information, not just a brand name like most URLs on the surface web. Silk Road: Once known as the ebay of illegal goods, the popular Darknet marketplace was taken down by the Federal Bureau of Investigation in October Tor: An acronym for The Onion Router, it is the software needed to access the Darknet and uses a technique called onion routing to allow anonymous access to the Internet. Tor Browser: A modified version of the Firefox browser. It is available for all major operating systems and allows access to surface net and Darknet websites. OCTOBER/NOVEMBER SHINING A LIGHT ON THE DARKNET Facebook into online privacy and major security hacks at online retailers, such as the recent data breach at Target. Celebrities could also drive a move to the anonymous internet, he suggests. It sounds daft, but if Angelina Jolie publicly comes out as going on the Darknet and it appears in gossip magazines and websites, then people will quickly migrate, because that kind of thing affects behaviour. Indeed, this trend may already have begun: on August cult musician Aphex Twin exclusively announced details of his eagerly anticipated new album via Tor, with the official tweet to a.onion link and the subsequent news coverage (including information on how to access the link) generating instant hype around the imminent release and the Darknet. A counterfeiting epidemic This ongoing trend means that brand owners may soon find themselves engaged in the war against counterfeiting on an entirely new front. But the growing use of Tor and the Darknet is just the latest in a series of ever-changing paradigms in the fight against counterfeiting, as Lewin explains. The traditional model, in which large quantities of fake goods were warehoused in various countries, has more recently been replaced by direct online sales to the consumer. This was a huge shift, because vendors openly advertised their products on the Internet and used methods to obfuscate their identity online by creating an alias or making it difficult to track where money was coming from and going to. Trademark counsel and brand owners have been playing catch-up, so the counterfeit goods HOW TO ACCESS THE DARKNET The Darknet is often portrayed as difficult to access, but it is actually very easy to set up and get started. 1. Download Tor: The easiest way to download Tor is to put Tor Browser Bundle into a search engine and download it from TorProject.org. The internet browser, based on the popular Firefox browser, allows you to use the Internet anonymously and allows access to Darknet domains that do not work on the surface net. 2. Take security precautions: Just as when accessing more dubious parts of the surface web, you should take precautions before using the Darknet: Make sure that all system software is up to date. Make sure that firewall software is running. Turn off Javascript and cookies in the Tor Browser settings. Turn off all other internet applications (eg;,other browsers and software). Never download anything from the Darknet, even innocent-looking images or PDF files. It is also highly recommend not to use a company network internet connection to connect to the Darknet, as it can open up the network to breaches from certain types of virus. 3. Find.onion website addresses: You will need to know the domain names you want to visit before you start, because there is no well-indexed search engine on the Darknet. However, many sites on the surface net contain links to marketplaces on the Darknet. We can recommend the continually updated lists on DeepDotWeb.com, which contains domains and reviews of over 40 active marketplaces, and the Ahmia search engine (www.ahmia.fi/address) for a long, up-to-date list of.onion URLs. game has moved to the next logical step after the good guys worked out how to track the bad guys on the surface internet. Their reaction was to move to an environment that is even more anonymous the Darknet. To gauge the full extent of this problem, World Trademark Review ventured onto the Darknet to determine what exactly is being sold and what brand owners should bear in mind when factoring this new threat into their anti-counterfeiting strategies. Of the 40 or so marketplaces that are operating on the Darknet, around six are invite-only (including Agora, regarded as the most popular). Many function in the same way as Amazon and other familiar online environments, with features including a search bar, user reviews for each listing, a list of delivery options and even add to basket and buy it now buttons. More detailed scrutiny of three Darknet marketplaces Evolution, the fourth largest at the time of publication, Andromeda and The Pirate Market reveals that drugs dominate the Darknet economy. As outlined in Table 1, three-quarters of the 11,000-plus listings analysed were for drugs, from illegal narcotics to legal highs and prescription drugs, which account for 14% of the total. This latter figure comes as no surprise to Lewin, who says that counterfeit pharmaceutical sellers have flocked to Tor due to the hypersensitive nature of their products. Even relatively rogue governments in terms of policies regarding trademarks and counterfeiting, such as China or India, look very seriously at those selling something that threatens the health of the population, he explains. So as law enforcement and other administrative agencies take a harder line, the counterfeit pharmaceutical sector has moved to the more clandestine environment of the Darknet. Nearly 600 of the listings were for counterfeit goods, from fake watches (29%) and electronics (25%) to bags (9%) and clothing (8%), with most offering multiple pieces per listing. Dube, who has purchased a range of products as part of his firm s investigations, said those available on the Darknet are the very best high-end, state-of-the-art counterfeits. There is a mismatch here with how slow and cumbersome things are to access, he adds. Once you get to a marketplace, you don t find cheap copies that are easy to spot as fake, but rather things that could fool even the most sophisticated distributor. He mentions one specific Darknet vendor who is selling counterfeit products on the Silk Road 2.0 marketplace: I have ordered a few samples of fake Cartier love bracelets from them and I would challenge anyone at quality control to tell them apart from the real thing. Our own research into the same vendor revealed at least 150 different high-end luxury listings, with brands affected including Alexander McQueen, Burberry, Canada Goose, Chanel, Dior, Dolce & Gabbana, Gucci, Lacoste, Louis Vuitton, Nike, Oakley, Prada, Ray Ban and Versace. Of course, as on the surface web, sometimes you order something and don t get it, acknowledges Dube. But generally, in my experience, high-end fakes on the Darknet are virtually impossible to distinguish from the real thing, so are priced higher than many of the counterfeit websites on the surface web. While there were no weapons on sale in the marketplaces we investigated, Marcello Tallarigo, 14 OCTOBER/NOVEMBER 2014 SHINING A LIGHT ON THE DARKNET FIGURE 1: Categories of goods available on three Darknet marketplaces Category % of total Cannabis 23.5% Ecstasy 14.1% Prescription drugs 13.6% Illegal stimulants 10.8% Accounts (bank accounts, website 7.2% subscriptions) Illegal psychedelics 6.8% Other illegal drugs 6.7% Card fraud 6.3% Counterfeit items 5.1% Pirate software 2.9% Forged IDs/passports 1.7% Cigarettes 1.1% Legal highs 0.4% FIGURE 2: Counterfeit items available on three Darknet marketplaces Category % of total Watches 29.3% Electronics (counterfeit/burner phones) 24.5% Money 19.6% Bags/wallets 8.6% Clothing/shoes 8.1% Sunglasses 6.5% Jewellery 1.8% Accessories (eg, phone cases) 1.8% director of online brand protection at Corsearch, says that counterfeit weaponry is also readily available: Counterfeit Berettas and Colts are all actively sold, not to mention branded heavy artillery and grenades. Warzones in Eastern Europe and Africa have proliferated excess inventory that is bought by and sold on the Darknet and shipped to the United States and beyond. Searching for fraud, phishing and security breaches But counterfeiting is not the only issue that trademark counsel and brand owners should be aware of when it comes to the Darknet. For example, Frederick Felman, chief marketing officer at MarkMonitor, says that the company often monitors the space for fraud operations. Sometimes we look for fraud kits that are used for phishing and other related things, because we want to identify how a particular fraud operation might use the surface web to attract consumers who could be susceptible to phishing attacks or credential attacks, he explains. For financial fraud, it s not as easy as finding something on a popular Darknet marketplace. You have to find different hidden forums and actually participate in their discussions; but they re very bad people, so you need to use various layers of obfuscation. Tallarigo confirms that financial firms are particularly Musician Aphex Twin exclusively released information about his new album on the Darknet, with the official tweet featuring a.onion link exposed on the Darknet, observing that marketplaces are inundated with credit cards from American Express, Visa, MasterCard and a variety of international banks: You can buy 10,000-plus valid credit cards for an average price of $2 to $10 each, and you can also get blank bank-specific slug cards and magnetic strip printers. There are also clues to surface net security vulnerabilities that are being exploited for profit. For example, one of the most popular items on Darknet marketplaces earlier this year was vouchers for UK supermarket Tesco ( 100 vouchers were being sold for 43), suggesting some kind of security glitch, as few other online retailer vouchers were offered around that time. An enforcement challenge for trademark counsel Trademark counsel facing these diverse challenges may feel that in many ways, the Darknet is a return to the deregulated Wild West Internet of the past, suggests Lewin: Working in the Darknet area is much harder than working on the surface net, where matters are more openly dealt with. The Darknet is a hyper-sophisticated arena, taking maximum advantage of digital secrecy. When you look at how the Darknet is structured, anonymity means there is no source, which creates an incredibly difficult tracing process. And unlike on the surface web, counsel cannot get results simply by finding and reporting counterfeit listings to website hosts. The DeepDotWeb spokesperson points out that Darknet marketplaces have no takedown procedures, essentially because their owners have no fear of being caught: You can guess that on markets that sell drugs openly, no one really cares about copyright or trademark infringement. The situation is not helped by the fact that, in general, most major brand protection companies have not yet integrated the Darknet into their programmes. Felman confirmed that MarkMonitor is not currently monitoring the Darknet for goods companies, because none have thus far come forward saying they believe it represents a credible threat to their brand. Brands have mentioned concerns, of course; but they don t think the risk is credible, he continues. They are generally spending their time looking for people who might be casual criminals or consumers who might be confused into OCTOBER/NOVEMBER SHINING A LIGHT ON THE DARKNET buying fake products and most of this happens on the brightly lit portions of the Web, because that s where consumers are and where confusion is likely to occur. This could change, though, and we ll be ready to help as soon as it is needed and demanded. The situation is similar at Corsearch although Tallarigo predicts that the recent acquisition of Citizenhawk, which can monitor millions of web pages and auction site listings, will see its focus shift to include Darknet monitoring and enforcement in the medium to longer term. From replica products to online vouchers examples of brand misuse on the Darknet Unlike on the surface web, counsel cannot get results simply by finding and reporting counterfeit listings to website hosts Brand owners are extremely weary of having to monitor the Darknet, because if they discover something, they could be liable, he adds. But prol
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