Blockchain analysis helps shut down “Mr. Dark’s dark site”

Dutch citizen known as “Mr. Dark”, who profited off rape videos and child pornography and gained $1.6 million using cryptocurrency, was indicted by the District of Columbia Jury.

Michael Rahim Mohammed, 32 y.o., managed a website called “Dark scandals”, which started working in 2012 on both the Internet and the Darknet. Over 2000 videos and images were stored on the server, and according to the statement on the website, “contained real episodes of blackmailing and sexual assault all over the world”.

Terms of service of the “black” website

Website users could pay with Bitcoin and Ethereum to download “packages” of illegal content, as well as upload own videos to the media library. The website received over 1650 cryptocurrency deposits, among which 188 were in Bitcoins and 26.7 were in Ethereum.

According to the website requirements, “fake, amateur, staged and already exposed movies” were prohibited. The rules insisted on presenting “real violence” content and underlined that “home production content” was in favor.

Connection with crypto wallets

While cryptocurrency financed the website, it also stored all the criminal details on the blockchain.

Law-enforcement authorities managed to trace down 303 BTC and ETH cryptocurrency wallets from which deposits to the website were originated. They used complex software developed by Chainalysis to trace transactions. And although not everyone has access to such services, its main functions are also applied in AMLSafe, which automatically checks assets to reveal any associations with fraudulent activities.

It is now being considered that all the confiscated money, obtained illegally, should be distributed among victims affected by the website’s activity. It’s also stated that many accounts were opened exclusively to make this one transaction (to pay Mr. Dark) and their KYC processes were incomplete. The analysis also helped to reveal other illegal addresses: “These accounts were used to make multiple payments to other Darknet services. These services were previously flagged by analytical blockchain companies, and this fact helped the law-enforcement authorities reveal illegal transactions”.

Darknet in not that dark anymore

The website was shut down after the launch of an international investigation involving American investigators, the Dutch National Police, Europole and the German Federal Criminal Police.

Michael Rahim Mohammed has been charged with distribution of child pornography and other illicit content.

Chef Don Fort of the IRS Criminal Investigation Department mentioned that this case is a wake-up call for other criminals, that the authorities are able to shed light on the Darknet: “Criminals, you must know that if you leave a digital footprint, we will find you. If you exploit our children, we will put you in jail. If you thought you were anonymous, think again. The Darknet today is not that dark anymore, thanks to all the hard work of the IRS-CI and our partner agencies”.

Crypto assets of this criminal website were confiscated, but before it happened the assets could have been used for other payments. That’s why it’s so important for online users who don’t want to be associated with “dark” digital currency to use services like the AMLSafe crypto wallet, which checks for links to illegal activity.

Other ways to use Bitcoin wallet

It’s hardly the first known case when cryptocurrency was used in criminal and dark activities. The main problem with illegal money is that somehow their lawful origin has to be proved to regulatory authorities. Unemployed citizens with luxury cars, huge mansions and multi-currency crypto wallet raise a lot of suspicions. Once the Internal Revenue Service wants proof, it most likely won’t get one.

Since cash is almost impossible to trace, the reasonable question here is: how to turn “dirty” money to cash? In most European countries or in the USA large amounts of cash attract increased attention, that’s why money laundering is an issue. To solve that, a tree-step system is used – “placement-obfuscation-integration”.

This way illegal fiat funds are first transferred to cryptocurrency. Secondly, the asses is broken up into numerous smaller amounts and transferred to different blockchain addresses, so that the origin of the funds is obscured. It’s the so called “wallet zero”. And only then such assets are integrated in one wallet and moved out into legal fiat currency. “Dirty” businessmen frequently invest in real estate and then get money out of it cleaner than before. However, special services stop such attempts even more frequently. It’s getting hard for criminals in the Darknet to escape the law.

This is to remind you to avoid illegal blockchain addresses and stay out of anything fraudelent. So if you want to know which Bitcoin wallet to choose, it’s recommended that you use AMLSafe, the first crypto wallet with automatic AML checking of assets in the world.