South Korea: Authorities Arrest Nine For Allegedly Selling Drugs For Crypto

Omar Faridi
  • South Korean authorities have arrested nine individuals for allegedly selling drugs.
  • The suspects had reportedly been dealing drugs using cryptocurrencies through the dark web.

Authorities in South Korea have reportedly arrested nine individuals for allegedly selling controlled substances online using digital currencies.

On December 23, the Seoul Central District Prosecutors’ Office released an official statement in which it noted that the alleged criminals had created a website in order to sell drugs via the dark web. According to the Korea Herald, the nine suspects believed to be involved in selling drugs using cryptocurrencies are in their 20s and 30s.

Police officials in Seoul also said that local resident Shin, the owner of the illicit website, has been taken into police custody.

636 Active Members, 50 Deals Conducted

Notably, communication between users on the dark web is usually encrypted by using special tools and web browsers such as Tor. It may be more difficult for law enforcement to track down illicit activities carried out using secret online forums, and conducting monetary transactions using pseudonymous digital currencies may make it even more challenging.

Local news outlets revealed that Shin’s website managed to attract a large number of users in the past few months. There were 636 active members between March and November that reportedly used Shin’s site to illegally purchase drugs on 50 different occasions.

In addition to arresting the people suspected of being involved in running the drug dealing operation, South Korean officials have now shut down the illicit website that was being used to sell drugs. According to police reports, the cybercriminals smuggled dangerous psychoactive drugs including LSD and MDMA (Ecstasy pills) from neighboring countries in order to sell them through the illicit website.

The suspects may have also grown cannabis and made hashish as they had been selling both controlled substances via the dark web. Prosecutors have charged Shin and the other individuals allegedly involved in selling drugs with smoking marijuana.

$88,700 Worth Of Drug Deals

The incident repor notes the drug dealers were using DarkCoin (a privacy-oriented digital currency) to conduct transactions. However, it is more likely that the offenders may have been using dash (DASH) to buy and sell drugs and/or other privacy coins such as monero (XMR) because DarkCoin has rebranded to Dash in March 2015.

In total, the prosecutors found that 100 million Korean Won (appr. $88,700) had been generated through the sale of drugs via the darknet website. Police officials will now be trying to confiscate the money as it was earned in an unlawful manner.

Earlier this year, authorities in the UK seized approximately 300 bitcoins (BTC), an amount worth over $1.7 million at the time. The large amount of digital currency was taken from a drug dealer after the crackdown of various money-laundering activities in which cryptocurrency had been used to hide the source of the funds.

Error in Time-Locked Bitcoin Contracts Allows for Miner 'Fee-Sniping'

Michael LaVere
  • Crypto researcher 0xb10c discovered an error in bitcoin "time-locked" transactions that could be used as an attack vector.
  • Miners can take advantage of the program to carry out "fee-sniping" and steal funds from one another. 

Users have discovered an error in bitcoin “timelocked” contracts that could potentially allow miners to steal BTC from one another. 

Anonymous crypto engineer 0xb10c reported discovering more than one million “time-locked” transactions made between September 2019 and March 2020. In a post, 0xb10c detailed how these special bitcoin transactions were not being accurately enforced by the network. 

As opposed to normal transactions, time-locked transactions prevent recipient bitcoin from being accessed after sending. Users must wait for a specific number of blocks to be added to the network in ten-minute intervals before gaining control of their bitcoin. 

0xb10c claimed the errant time-locked transactions provided an attack vector for miners to steal transaction fees  from one another via “fee-sniping.” According to the engineer, the backlog of time-locked transactions were being purposefully designed for a “potentially disruptive mining strategy” involving the theft of miner fees. 

In an interview with CoinDesk, 0xb10c said time-locked transactions represented a “low-priority” problem at present that could eventually balloon to involve the wider network. He explained that fee-sniping would become more lucrative in a few years as the majority of miner income shifts towards transaction fees. 

He continued, 

A fix for this has been released in early 2020. However, it will take a while before all instances of the currently deployed software are upgraded.

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