Discrediting vendors in online criminal markets

This study examines the signals of trust in stolen data advertisements by analysing the structural and situational factors that influence the type of feedback sellers receive. Specifically, this article explores the factors associated with positive and negative buyer feedback from the purchase of stolen credit card data in a series of advertisements from a sample of Russian and English language forums where individuals buy and sell personal information. The results of zero-inflated Poisson regression models suggest that the sellers may influence their likelihood of receiving feedback by specifying the type of payment mechanism, choosing the advertisement language and selecting the type of market they operate within. The implications of this study for our understanding of online illicit markets, criminological theory and policy-making will be explored in depth.

Journal of Economic Perspectives, 2009

This paper will focus on online crime, which has taken off as a serious industry since about 2004. Until then, much of the online nuisance came from amateur hackers who defaced websites and wrote malicious software in pursuit of bragging rights. But now criminal networks have emerged—online black markets in which the bad guys trade with each other, with criminals taking on specialized roles. Just as in Adam Smith's pin factory, specialization has led to impressive productivity gains, even though the subject is now bank card PINs rather than metal ones. Someone who can collect bank card and PIN data, electronic banking passwords, and the information needed to apply for credit in someone else's name can sell these data online to anonymous brokers. The brokers in turn sell the credentials to specialist cashiers who steal and then launder the money. We will examine the data on online crime; discuss the collective-action aspects of the problem; demonstrate how agile attackers shi...

Global Crime, 2015

Research examining offender risk reduction strategies within illicit markets focus primarily on those operating in the real world for drugs and stolen goods. Few have considered the strategies that may be used by individuals in virtual illicit markets that are hidden from public view. This study addresses this gap through a grounded theory analysis of posts from 10 Russian and three English language web forums selling stolen data to engage in identity theft and fraud. The findings indicate that buyers employ multiple strategies to reduce their risk of loss from unreliable vendors, along with resources provided by forum administrators to manage relationships between participants. The implications of this study for law enforcement and offender decision-making research are also discussed.

Policing and Society, 2013

At the beginning of the 21 st Century, before the power of online social networking became apparent, several studies speculated about the likely structure of organised cybercrime . In the light of new data on cybercriminal organisations, this paper sets out to revisit their claims. In collaboration with the Serious Organised Crime Agency (SOCA), this paper examines the structure of organised cybercrime by analysing data from online underground markets previously in operation over the Internet. In order to understand the various structures of organised cybercrime which have manifested, theories are drawn from social psychology, organised crime and transaction cost economics (TCE). Since the focus is on how uncertainty is mitigated in trading among cybercriminals, uncertainty is treated as a cost to the transactions and is used as the unit of analysis to examine the mechanisms cybercriminals use to control two key sources of uncertainty: the quality of merchandise and the identity of the trader. The findings indicate that carding forums facilitate organised cybercrime because they offer a hybrid form of organisational structure that is able to address sources of uncertainty and minimise transaction costs to an extent that allows a competitive underground market to emerge. The findings from this study can be used to examine other online applications that could facilitate the online underground economy.

Sociological Research Online

Illicit market exchanges in cybercriminal markets are plagued by problems of verifiability and enforceability: trust is one way to ensure reliable exchange. It is fragile and hard to establish. One way to do that is to use the administrative structure of the digital market to control transactions. This is common among a specific type of market – darknet cryptomarkets. These are sites for the sale of illicit goods and services, hosted anonymously using the Tor darknet. However, reliance by users on the technology and the market administrators exposes users to excessive risk. We examine a case of a market that rejects several key technological features now common in cryptomarkets but that is nonetheless reliable and robust. We apply a techno-social approach that looks at the way participants use and combine technologies with trust relationships. The study was designed to capture the interactional context of the illicit market. We aimed to examine both person-to-person interaction and ...

C an organized illegal activities grow stronger and more advanced in response to legal pressure? In October 2013, the FBI shut down Silk Road, a thriving e-commerce market for illegal drugs. After the shock, market actors adopted a new identity verification method that enabled mass-migration to other markets, and created websites for information distribution that reduced post-shock uncertainties. The outcome was a decentralized market in which actors could operate in "open secrecy" across multiple websites. With verifiable pseudonyms and securely obfuscated real-world identities, actors could publicly discuss, plan, and participate in illegal activities. Threats from police and opportunistic criminals persisted but were no longer crippling concerns as buyers and sellers could reasonably expect that their exchange partners would be available for future business; the illegal market could operate more like a legal one. Drawing on quantitative and qualitative data, the author argues that advances in information technology have expanded the opportunity structure for cooperation and creative problem-solving in the underworld, and therefore that shocks did not hinder but rather stimulate development in digital drug markets. Data, collected in 2013-2017, include nearly one million transactions from three illicit e-commerce markets, three million messages from eight discussion forums, and website traffic from two market-independent websites.

Researchers, policymakers and law enforcement agencies across the globe struggle to find effective strategies to control criminal networks. The effectiveness of disruption strategies is known to depend on both network topology and network resilience. However, as these criminal networks operate in secrecy, data-driven knowledge concerning the effectiveness of different criminal network disruption strategies is very limited. By combining computational modeling and social network analysis with unique criminal network intelligence data from the Dutch Police, we discovered, in contrast to common belief, that criminal networks might even become 'stronger', after targeted attacks. On the other hand increased efficiency within criminal networks decreases its internal security, thus offering opportunities for law enforcement agencies to target these networks more deliberately. Our results emphasize the importance of criminal network interventions at an early stage, before the network gets a chance to (re-)organize to maximum resilience. In the end disruption strategies force criminal networks to become more exposed, which causes successful network disruption to become a long-term effort.

The Palgrave Handbook of International Cybercrime and Cyberdeviance

This chapter provides an overview of what we know about organized forms of cybercrime executed with a financial goal. First, criminal cooperation is covered. We discuss recent insights into the structure, composition, and mechanisms of origin and growth. Second, bottlenecks in the criminal business process and criminal money flows are described. Every criminal business process entails logistical bottlenecks: logistical problems that must be resolved to ensure the successful execution of criminal activities. One major bottleneck is safely spending illegally obtained money without drawing the attention of the authorities. After all, when it comes to financial cybercrime, the goal of criminals is gaining financial benefits. Finally, in the last section of this chapter, several overarching conclusions about organized forms of cybercrime are presented.

The current narrative in criminology is that drawing behavioural parallels between groups observed in virtual markets and groups within illicit markets is hampered by the lack of legal frameworks to outline and describe criminal activities. Without a legal framework it is a struggle to distinguish normative behaviour from deviant behaviour. However, this paper argues that rather than lacking legal frameworks, virtual worlds have an extensive set of formal and informal social controls that approximate the legal and social regulations placed on illicit markets in the real world. Both the virtual market and illicit markets are punctuated by their use of violence as a tool to resolve disputes, protect markets and enforce financial transactions in the ongoing absence of legal regulation. Therefore, that if the criminological narrative can be adapted to recognise the parallels between the two markets, then the opportunity exists to study the behavior of individuals and groups in a controlled and well observed setting contained in virtual markets. This will provide insights into the structures and relationships between illicit market groups in the real world.

Technological Forecasting and Social Change, 2013

With the growing sophistication and use of information technology, the past decade has witnessed a major growth in financial cybercrime. This paper focuses specifically on credit card fraud and identity theft, examining the globalisation of these activities within a 'digital ecosystem' conceptual framework. The relevance of concepts and analytical tools typically used to study legitimate businesses, such as value chains, dynamic capabilities and business models, is explored and tested for their relevance in understanding the scale and nature of illegal activities which are dependant upon innovation and the collective activities of global participants. It is argued that developing a better understanding of how such illegal activities are organised and operate will assist policy makers, law enforcement agencies and security firms to identify trends and concentrate limited resources in a most effective manner.