Bench & Bar

SEP 2018

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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19 BENCH & BAR | C ryptocurrencies like Bitcoin have earned a dubious reputation for their use by criminals to do things like buy mail-order narcotics online or laun- der proceeds of illegal activities. e most well-known example of crime facilitated by cryptocurrency was on the now-defunct virtual marketplace "Silk Road." e web- site was shut down—at least in its original incarnation—after its creator Ross W. Ulbricht, known on the site as the Dread Pirate Roberts, was arrested in 2013. Using Bitcoin as its currency, the site facilitated an estimated $300,000 in sales of drugs and other contraband daily at its height. Ulbricht, referred to by prosecutors as "the kingpin of a worldwide digital drug-traf- ficking enterprise," was accused of using the platform to solicit murder for hire. In 2015, Ulbricht was convicted on five criminal counts, including engaging in a continuing criminal enterprise and aiding and abet- ting in the distribution of drugs over the internet. Ulbricht received a life sentence from a federal judge in the Northern Dis- trict of California, who made an example of the "unprecedented" criminal kingpin. 1 Other online black markets—where cryp- tocurrency is king—have proliferated on the "dark web" or "darknet" since then, through an ever-evolving array of sites like later law enforcement targets AlphaBay and Hansa (not to mention Silk Road versions 2, 3, and 3.1), accessible through encrypted browsers like Tor. 2 When addressing a conference of law enforcement and financial regulation pro- fessionals, Deputy Attorney General Rod Rosenstein remarked that, "[e]merging cur- rencies have the potential to transform the world, and to do so in a positive way[,] [b]ut criminals are also increasingly using virtual currency to perpetrate fraud schemes and conceal the proceeds." 3 While the myriad criminal uses for and abuses of virtual cur- rency are too vast to address fully here, this article will introduce some of the topics and trends at the intersection of cryptocurrency and law enforcement efforts. Like cash, vir- tual currency has become ubiquitous in the realm of criminal enterprises, based both on and off-line, as users are lured by the pos- sibility of transacting their illicit business anonymously. e use of cryptocurrency to commit, facilitate, or cover up crime creates new and ever-evolving challenges for law enforcement agencies and regulators. As governments and private sector security firms scramble to keep up with—and get ahead of—new technologies in the pro- verbial Wild West of cybercrime, private attorneys may also find it necessary to shield themselves and their clients from a growing wave of high-tech crime. BEYOND THE SILK ROAD Contrary to expectations, committing cybercrime does not necessarily require high-level technical expertise. Roy Zur, a cybersecurity expert and the founder and CEO of Cybint Solutions (part of e BARBRI Group), emphasized the relative ease of accessing the criminal underworld online in an interview with the Associa- tion of Certified E-Discovery Specialists (ACEDS) in 2016. Zur holds both an LLM and an MBA from Tel-Aviv Univer- sity, and he spent a decade on the frontline of cybersecurity in the Israeli military. As Zur warns, "the average hacker online is a criminal who is using, instead of a knife, or a bomb, or whatever you need to do your crime, he uses tools . . . you can search Google to find . . . [you can] find links to [the] darknet and then you can download the Tor browser. . . and then you can just get into the website and order a hitman in five minutes, using Bitcoin." Zur concedes that, "maybe you need to be a bit tech savvy" to commit crimes online with cryptocurrency, "but not more than the average person who uses technology." 4 Online marketplaces, fueled by cryp- tocurrency, allow criminals to purchase ready-made and user-friendly online frauds like phishing scams or ransomware that they themselves would be unable to code or install. Many sellers also offer second- hand stolen information like credit card numbers and medical data. In an inter- view for this article, Zur added, "It's quite easy to become a seller of one of these dark web platforms, and even easier to become a buyer. So if you obtained confidential information and anything that has value— from a stolen UBER account to top secret military documents—you can trade them while keeping your anonymity." 5 One such forum, known as Darkode, was targeted in a large-scale 2015 takedown by the FBI, in

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