Online drug sales, money laundering, prepaid cards

People's Drug Store 8/15/16
People’s Drug Store 8/15/16

Dark Net drugs sales have tripled since 2013 when Silk Road was closed. While still a tiny part of overall drug sales, the anonymous nature of the transactions makes it ideal for using dirty money. The Dark Net is accessible only by the Tor browser. Everything is encrypted and routed through anonymous relays. Payments are made in cryptocurrency.

Buyers are purchasing in wholesale quantities, presumably for offline distribution.

There is evidence that drugs sold on cryptomarkets are fueling offline drug markets, with buyers sourcing stock for offline distribution. Twenty five per cent of total drug transactions on cryptomarkets during January 2016 were greater than $1,000.

In related news, credit card companies continue to resist regulations on hugely profitable prepaid cards, even as they are clearly used for money laundering. Some U.S. big box stores will cheerfully, and without questions, convert multiple prepaid cards into other prepaid cards (or cash) because they get a cut.

In 2011, Kumar Kibble, then Deputy Director at U.S. Immigration and Customs Enforcement testified in Congress that authorities had found hundreds of the cards hidden “in a compartment similar to those used to conceal cash, drugs and other contraband.”

John Tobon, deputy special agent in charge of Homeland Security Investigations in Miami, said the cards can be used to pay couriers smuggling money, drugs or other merchandise as large cash transactions come under greater scrutiny.

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