International Dragnet Cracks Down on Darknet Trade

A recent multinational crackdown on illegal activity in the anonymous channels of the so-called Darknet recently resulted in multiple arrests around the world. But how much the dragnet will help to thwart the distribution of counterfeit electronics and other illicit goods in the future remains in question.

 “Operation Hyperion,” consisting of law enforcement agencies from the U.S., Australia, Canada, New Zealand, the United Kingdom, and the European Union's Europol, is what the group said is a first step in prosecuting those who break laws while hiding their identities with software such as Tor on the Darknet.

The law enforcement agencies' dragnet in October mainly involved counterfeit pharmaceuticals and data, but also lead to arrests of perpetrators brokering electronic components, chemical toxins, stolen credit card information, and even services used for murders for hire and money laundering.

Specific to the electronic components, law enforcement officials found “several products destined for the U.S. military supply chain,” Danielle Bennett, the primary law enforcement arm of the Department of Homeland Security (DHS), U.S. Immigration and Customs Enforcement (ICE), told EBN.

Counterfeit components for the U.S. military supply chain were among the items seized during the international dragnet. Photo Courtesy: U.S. Immigration and Customs Enforcement (ICE).

Counterfeit components for the U.S. military supply chain were among the items seized during the international dragnet. Photo Courtesy: U.S. Immigration and Customs Enforcement (ICE).

“What this shows is that international law enforcement has the ability to stop the flow of illicit and counterfeit goods on the Darknet. The Darknet does provide levels of protection against bad people trying to do bad things, but there are law enforcement efforts underway to go after these people,” Bennett said. “We are going also going behind the Web sites that service as the forums but are also going after the buyers and sellers themselves, which represent an important piece of the trade.”

ICE officials noted how Tor software can be used for legitimate purposes, such as masking communications among users in “authoritarian countries” or when journalists use it to protect sources; while the software has also increasingly served as a way to anonymously purchase illegal goods and services over the Darknet.

However, the degree to which the law enforcement crackdown will mitigate further attacks, the counterfeit electronic component sales, and other illicit trade remains murky at best. By definition, the Darknet, and more specifically, the use of Tor software to protect those seeking to sell and distribute counterfeit components and stolen intellectual property-related information covers a vast international underworld of illicit commerce that is difficult to quantify.

 “[Darknet channels] are more difficult to track because sophisticated attackers have a vast network of redirection points before they ever launch an attack against their networks. They are able to tunnel their traffic through multiple hop points usually in a number of countries,” Mike Morris, CTO for root9B, told EBN. “After the theft of this data, they can use a separate set of hop points to access a large array of providers hosting Darknet sites. If they are sophisticated enough, this is a network of nearly endless hop points coupled with anonymous personalities and transactions.”

Law enforcement bodies are also restricted from prosecuting counterfeiters or data thieve who steal intellectual property-related data using the Darknet who are sponsored by the foreign governments in the countries in which they operate. Many of these virtually untouchable “threat actors” operate out of nations such as China, Russia, and Taiwan, James Scott, co-founder and senior fellow of ICIT, told EBN.

“Without extradition agreements and the assistance of local law enforcement in those regions, the taskforce can do little more to arrest sellers than launch social engineering attacks to lure them out of the country,” Scott said. “Without cooperation, the task force can still target some of the markets and forums where counterfeit goods and intellectual property is exchanged and it can arrest buyers in an attempt to deter sales–although neither effort would result in the same impact as arresting the sellers because in many cases, the seller is also the threat actor with the capability to steal the data in the first place.”

There can also be difficulties with law enforcement alliances between countries that have different legislation in place against the sale and distribution of counterfeit semiconductors and other electronic components.

“The fact this is said to be a multinational law enforcement effort causes a slight issue in terms of bringing justice. Particularly, the collaborated effort is made up of countries where there is a broad agreement about the illegality of a potentially criminal activity,” Morris said. “In the countries that are said to be collaborating, it would seem that there are not widely agreed upon intellectual property laws. Making the determination of an intercepting entity to determine what is deemed to be IP and what is not.”

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