The Ethics of Trading Cryptocurrency on the Deep Web

Cryptocurrency on the Deep Web

Traders of cryptocurrencies have been using the Deep Web, or dark web, to buy and sell these digital assets since early 2018. As a result, these markets have become increasingly lucrative for criminal activity. These activities can include human trafficking, terrorism and ransoming, among others (Fanusie & Robinson, 2018; Foley et al., 2018).

In 2021, $14 billion of cryptocurrency deep web value was tied to illicit activities, according to cybersecurity firm Cybersixgill. This figure represents a small fraction of the world’s total value of $80 trillion, but it’s still significant, especially considering that the number of people trading cryptocurrencies is still growing.

There are many reasons for this growth. Some are positive, such as the fact that cryptocurrencies are decentralized and can be transferred quickly across borders. But there are also negatives to them, such as the lack of privacy and a risk that they could be manipulated for large swings in price.

The Ethics of Trading Cryptocurrency on the Deep Web

The lack of privacy in cryptocurrency transactions is especially relevant for those who are not recognized as state citizens. Some countries are war-torn or lack any real infrastructure to offer identification, and so a cryptocurrency wallet provides a convenient way for those in these circumstances to keep their wealth safely stored.

There is a strong need for appropriate regulatory frameworks for trading cryptocurrencies, especially at the national level. These regulations should include measures to combat money laundering, fraud and terrorism. These rules should also apply to the underlying marketplaces and financial products offered by cryptocurrencies.

The current legal frameworks designed to protect consumers against fraudulent and other financial misconduct are not well-suited to regulating cryptocurrency exchanges or the underlying digital assets that underpin them. For instance, laws governing securities are not well-suited to digital assets, and the law of contract is often not applicable when transactions involve automatically executable contracts (ISDA, 2017).

While some regulators have taken action against crypto exchanges that break regulations, there is no regulatory structure in place at the federal level. This means that there is no global coordination to address issues such as market manipulation and fraud, said Kevin Werbach, a Wharton business ethicist who has been working with regulators around the world on informal dialogue.

While cryptocurrency may be used to help avoid paying taxes, this is a controversial issue for many, as it may violate an ethical framework that places an emphasis on private property rights. This is particularly relevant to developing countries where government control over currency is limited.

A recent study found that a small fraction of crypto transactions on the dark web are aimed at nefarious activities such as tax evasion or online crime. This is because a cryptocurrency can be traded for goods and services without the requisite state ID, which can make it difficult to verify the legitimacy of these transactions.