SOCRadar® Cyber Intelligence Inc. | Dark Web Stories: Escrow


Aug 25, 2022
5 Mins Read

Dark Web Stories: Escrow

Have you ever heard of the term dark web? Besides sheltering various individuals from spies to threat actors in its highly private environment, the dark web also hosts black markets of different sizes. According to a study from Chainalysis, Bitcoin transactions in those markets can have up to $2 Billion in total annual value. For example recently shutdown of Hydra marketplace, the authorities traced the information of $5.2 Billion valued transactions back to 2015. Also, it’s good to remember Hydra was just a market in this huge network. So, what are these transactions for?

The Story Behind Dark Web Escrow Services

Mainly for the illegal trades that one cannot carry out plainly. The suppliers share a lead of what they want to sell in some dark forums or Telegram channels to contact the buyers anonymously. Every step from first contact to the transaction is made in privacy. And the most popular commodity in those markets is information. Threat actors create vast databases after they steal the data. These data can vary from personal information to the credentials of high-level executives of a corporation.

After years of stable growth, black markets on the dark web eventually led to the birth of another group of people, hyenas. These people defraud the threat actors who stole the data in the first place! As in any market, after the emergence of the hyenas, the market was in danger of shrinking. The solution was a simple adaption from the legal trade world, escrow service.

What is Escrow Service?

Escrow service, or “middleman service” in some dark forums, aims to prevent any possible fraud by putting in a middleman, or guarantor, between buyer and supplier. That way, any of the parties can be protected from the other.

A dark web post outlining the rules about the escrow service.
A dark web post outlining the rules about the escrow service.

How Does it Work?

The middleman takes data and money and then checks whether what parties provided satisfies the other side’s criteria, and you guessed it right! The middleman does that in exchange for a commission. The usual deal in the market is that the buyer pays for the commission. Nevertheless, is the system safe? No.

There is no way to understand or prevent if a middleman stores the data or seizures the money. On the other hand, these middlemen usually are someone who has a good reputation on the dark web. Considering that people have been there just by their nicknames, having a good reputation is the only virtue one can have anonymously. Therefore, none of the middlemen usually attempt to do such a thing because they are paid for what they do.

It’s also worth mentioning that losing your reputation has much more severe consequences compared to the average transaction amounts on the market and that to build a reputation, one must be a well-known threat actor who has been selling or buying data on the market for a while. So it is a long and costly process.

Further Improvements In the Service

The need for a “securer service” is so high that most markets have their own “official middleman” that guarantees your safety. Some markets even have a platform for people to open tickets if they encounter a problem. Afterward, “the authority” takes both parties’ defenses and judges the situation.

Some markets offer automated escrow services and explanations about how to use them.
Some markets offer automated escrow services and explanations about how to use them.

Some markets take the business a step further and create different systems in which the middleman only passes money. The buyer checks whether the sold data is satisfactory or not. Therefore, critical data can be safely transferred without the risk of any leak.

Some markets accept accounts with considerable entrance fees to evade fraud incidents. The parties verify accounts in these markets, even if the buyer and supplier are contacted via another platform, such as Telegram. So in case of an incident, the responsible user can be tracked down and kicked out of the market.

Dark Web is a vast area that hosts lots of illegal activities. These activities are so frequent that, coming together, they create a big market that nearly doubles itself every two years. Like any other market, there is also a risk of fraud. Escrow service is a solution to ensure this dark market’s safety. And the importance given to this system is so great that it is possible to see many improvements and adaptions.