- Dark web drug dealer Ryan Farace or Xanaxman has been charged in the US for laundering $137M in Bitcoin.
- Blockchain tech proves useful in the fight against piracy for Microsoft and Tech Mahindra.
A dark web drug dealer by the name of Ryan Farace has been indicted for laundering $137 million in Bitcoin. Also known as Xanaxman, Farace was currently serving a 57-months prison sentence before the recent indictment.
With help from his father Joseph Farace, Farace likely continued his illegal drug operations while in prison. This is according to the unsealed Maryland federal court indictment last week. Additionally, Farace laundered a hefty sum of proceeds between October 2019 and April 2021.
In February and May, the US Drug Enforcement Administration seized 2,875 and 59 Bitcoins respectively, from addresses linked to Farace. These digital assets amount to over $137 million at current market rates.
Dark web drug business
Earlier on, Farace was sentenced to prison for selling the anti-anxiety drug Alprazolam, or Xanax, on the dark web. A November 2018 court order shows that he was ordered to forfeit about 4,000 Bitcoins earned from the illicit business. This amount is currently worth $187.2 million.
Additionally, he was ordered to hand over other non-crypto proceeds of his drug operations. These amounted to more than $5.6 million in both cash and property. Nevertheless, the recent court documents did not specify if the enforcement agency knew about the freshly seized Bitcoins or that Farace acquired them while in prison.
For a long time now, authorities have battled the adoption of Bitcoin and other cryptocurrencies because they enable crime. They provide high user anonymity and also allow criminals to garner interest, making them favored for dark web payments.
Notably, the 2013 Silk Road market shutdown marked one of the largest Bitcoin busts from the dark web. The infamous market was one of the largest illegal marketplaces for illicit drug distribution. The market’s shutdown, however, did not cut all illegal operations. Blockchain analysis platform Chainalysis report shows that cryptocurrencies worth roughly $800M was moved to the dark web in 2019 alone.
Blockchain tech used for anti-piracy measures
That said, blockchain technology, which underpins cryptocurrencies, remains a critical tech point. For instance, Microsoft recently announced its intentions to leverage Ethereum blockchain tech to tackle high-spreading piracy.
In partnership with Alibaba and Carnegie Mellon University researchers, Microsoft researchers studied the blockchain-based anti-piracy incentive system. Entitled, “Argus: A Fully Transparent Incentive System for Anti-Piracy Campaigns,” it provides a trustless incentive mechanism for piracy reporters. Argus also protects the information provided by the open anonymous informants.
Importantly, Argus enables backtracing of pirated content to the source with a corresponding watermark algorithm. A feature known as an information-hiding procedure ensures that no two informers can report the same watermarked copy. The system also has incentive-reducing safeguards to prevent the same informer from reporting the same piracy under different aliases.
As for the Ethereum network fees, the system provides cost-efficiency by equating one report to making 14 ETH transactions. Similarly, blockchain has been used to fight piracy by the IT firm Tech Mahindra.