Photo/Shetuwang

May 20 (NBD) -- The alleged owners and operators of a website known as DeepDotWeb (DDW) have been indicted by the U.S. Department of Justice early this month for money laundering conspiracy, relating to millions of dollars in kickbacks they received for sales of fentanyl, heroin, and other illegal goods on the darknet.

Darknet is often associated with the encrypted part of the Internet where illicit trading takes place.

According to information released on the website of the Department of Justice, these kickback payments were made in virtual currency, such as bitcoin, and paid into a DDW-controlled bitcoin "wallet".

Between in and around November 2014 and April 10, 2019, DDW received approximately 8,155 bitcoins in kickback payments from Darknet marketplaces, worth approximately 65 million U.S. dollars based on the trading value of bitcoin, around 8,000 U.S. dollars per bitcoin, at 14:00 on Monday (Beijing Time) on Bitstamp, the world's longest-standing crypto exchange.

"DDW, in essence, constitutes a portal into the Darknet marketplaces, providing referral links for illicit sales," analyzed Sun Zhiyong, guest professor at China University of Political Science, in an interview with National Business Daily (NBD). "DDW engaged in and profited from transactions involving cryptocurrency (mainly bitcoin)."

Sun told NBD that bitcoin, the first decentralized cryptocurrency, has been not only wildly acclaimed but also reviled ever since its creation and the major cause for its bad reputation is anonymity which is often exploited in criminal acts.

But Sun pointed out that bitcoin as a means of payment in illicit transactions doesn't necessarily make it "a means of committing a crime", in that all currencies, credit-based national currencies or metallic money, are anonymous and can be used in illegal trading. "No research has found that the existence of bitcoin has increased crime rate."

Sun held that the significant difference between bitcoin and national currencies, taking the U.S. dollars for example, lies in that the regulation has been put in place over transactions in dollars (excluding cash). "Although the currency is anonymous, transfer and remittance are signed."

To take bitcoin under supervision and regulation without compromising its advantages in payment is very important, Sun noted.

Currently, the legislative bodies of different countries take a different regulatory stance towards bitcoin. China, for instance, regards bitcoin as "virtual goods that have no legal status or monetary equivalent and should not be used as currency", Sun said to NBD citing a statement the People's Bank of China sent out in late 2013.

Email: gaohan@nbd.com.cn