ANTH106 Lecture Notes - Lecture 8: Ethnography, Participant Observation, Sudhir Venkatesh
2 Jun 2018
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ANTH106 Lecture 8 – Darknet Drug Trading in Australia: implications, trends
and harm reduction possibilities
Outline –
• What are cryptomarkets?
• How do they work?
• Implications for organised crime and police
• Cryptomarket trading in Australia
What is a cryptomarket?
• A cryptomarket is “an online forum where goods and services are exchanged
between parties who use digital encryption to conceal their identities”
• Share the following characteristics:
o Third-party hosting and administration
o Use of traditional postal systems to deliver goods
o Decentralized exchange networks
o Use of aliases to conceal user identity
o Reliance on the Tor network
o Use of encrypted electronic currency (e.g. Bitcoin)
Network inefficiency –
• Complex and large networks are resilient but also relatively inefficient
• Each distributing node has to be compensated for participation
• Outcomes:
o Price increases
o Product adulteration
Producer → Consumer
• Eliminates all intermediary nodes between a drug manufacture/cultivator and
consumer
• Most efficient and radically transformative network formation
• Possible due to anonymising technologies and geographical separation
• Appear most likely to form with organic drugs (e.g. cannabis) as well as
synthetics
Wholesaler → Consumer
• Eliminates intermediary nodes located at the international trafficking,
domestic supply and retail stages of distribution
• Most likely to form with semi-synthetic drugs with complex multi-stage
manufacturing/supply (e.g. cocaine, heroin)
• Capacity to reduce organised crime associated with drug distribution in
destination but not source countries
Business → business
• Form when drug retailers purchase online then on-sell to consumers
• May also include social suppliers who distribute drugs at little or no profit
• Integrated with and most closely resemble conventional drug distribution
networks
• Eliminate key bottlenecks in supply and reduce the importance of traffickers
find more resources at oneclass.com
find more resources at oneclass.com
• Particularly relevant for customers who lack the capacity to access
cryptomarkets
Customs and Postal interception – implication for law enforcement;
• Huge increases in volume of legit trade
• Vast majority of goods not subject to inspection
• Customs profile suspect items based on risk profiles
• Risk matrix = different factors that would raise red flags of the suspiciousness
of an item (red flag i.e. body language)
• ‘Stealth’ improved by:
o competitive vendor rankings
o leaked customs documents
o online forum communications
o online drug purchases typically small (easy to conceal in envelope)
Evidence Gathering and Resource Allocation:
• Goods detected through the post not necessarily enough to justify prosecution
• Additional evidence gathering (e.g. surveillance) is resource intensive
• Generally small quantities result in lower level possession charges
• Successful prosecutions end with consumers – no capacity to follow up the
chain of supply
Cyber-Investigations – Operation Onymous:
• Complex multi-jurisdictional cyber investigation involving cooperation
between agencies including Europol, FBI and US department of Homeland
Security
• Likely target vulnerabilities in Tor or cryptocurrency encryption
• Shut down 27 cryptomarkets, including Silk Road 2
• 18 arrests worldwide, seizure of $1 million in Bitcoin
• Dozens of large cryptomarkets remain operational with more in development
• Drug vendors able to maintain trading due to presence across multiple
cryptomarkets
Size of the Australian online market:
• 152 unique active vendors in Australia
• 2nd highest per capita number of vendors
• 1136 active products
• 40.7% of total listings active
• World’s highest proportion of active product listings
• World’s highest proportion of domestic-only sales (90.5%)
• Highest concentration = Netherlands
Number of transactions:
• The most popularly traded drugs in Australia are:
o Cannabis (25%)
o Prescription drugs
o Ecstasy
o Methamphetamine
o Psychedelics
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Anth106 lecture 8 darknet drug trading in australia: implications, trends and harm reduction possibilities. Outline : what are cryptomarkets, how do they work, cryptomarket trading in australia. Network inefficiency : complex and large networks are resilient but also relatively inefficient, each distributing node has to be compensated for participation, outcomes, price increases, product adulteration. Business business: form when drug retailers purchase online then on-sell to consumers, may also include social suppliers who distribute drugs at little or no profit. Integrated with and most closely resemble conventional drug distribution networks: eliminate key bottlenecks in supply and reduce the importance of traffickers, particularly relevant for customers who lack the capacity to access cryptomarkets. Stealth" improved by: leaked customs documents: competitive vendor rankings, online forum communications, online drug purchases typically small (easy to conceal in envelope) Cyber-investigations operation onymous: complex multi-jurisdictional cyber investigation involving cooperation between agencies including europol, fbi and us department of homeland.
