On the Dark Web, everything is for sale, from weapons, drugs and information to just about anything else imaginable. After the fall of Silk Road, the Evolution market became the go-to shopping site for all things illegal. But in a move that should surprise absolutely no one, the founders of Evolution, known as “Verto” and “Kimble,” have reportedly closed down the site and taken an estimated $12 million worth of bitcoin with them.
According to Naked Security, everything was going along smoothly for Evolution until last week, when a supposed site administrator named NSWGreat made a Reddit post claiming Verto and Kimble were planning to abscond with $12 million in pocket. A few days later, the site went down and never came back up. All transactions were suspended, and the money was gone. There was no indication that this was the work of law enforcement.
The site’s creators allegedly got away with so much in bitcoin because of Evolution’s escrow system. Since both the buyers and sellers of illegal items tend to be on the suspicious side — after all, one could be undercover law enforcement or looking to peddle fake merchandise — the Evolution market used an escrow solution to keep all money on hold until both parties were satisfied. The problem? This left a large amount of bitcoin under the control of the site administrators.
As noted by the Washington Post, it is possible to limit the success of this exit strategy by using a multiparty signature, which requires both buyers and sellers to approve administrative decisions. Although reports claim Evolution was running some kind of signature system, it obviously wasn’t up to snuff.
Bit by Bit
The Evolution collapse and subsequent fallout isn’t a surprise for Dark Web users or technology users at large. Online transactions inherently include an element of risk, and once criminals looking to purchase goods outside of mainstream channels are added to the mix, it’s hardly a surprise that two of them reportedly decided to serve their own interests.
What’s more intriguing, however, is the effect on bitcoin. The alternative currency has a wildly fluctuating exchange rate and has experienced more than a few problems, such as the Mt. Gox debacle. However, as noted by IT Pro, there is still hope the currency can be effectively managed. The U.K. government recently announced a plan to regulate all digital currency exchanges. According to News.com.au, however, some comments on the Evolution market debacle see it as a sign of things to come.
“This is like Step 125 on the journey of [bitcoin users] discovering piece by piece exactly why financial regulations exist,” one Reddit poster commented.
In other words, while the idea of bitcoin and similar currencies is appealing, they all come with the same risk and random devaluation or outright theft in a way that isn’t possible with more traditional online payments.
Evolution may be gone, but the Dark Web always has something to offer users looking for items they can’t buy on the Internet at large. What’s worth watching here is how the market reshapes itself around yet another debacle. Are drug dealers and information sellers going to start making rules instead of breaking them? Is the criminal boom-and-bust cycle the new blueprint for online transaction security?