Thwarting The Growth Of Internet Black Markets

"These troublesome entrepreneurs even offer tech support and free updates for their malicious creations that run the gamut from denial of service attacks designed to overwhelm Web sites and servers to data stealing Trojan viruses," said Perrig, an associate professor of electrical and computer engineering and engineering and public policy.

In order to understand the millions of lines of data derived from monitoring the underground markets for more than seven months, Carnegie Mellon researchers developed automated techniques to measure and catalogue the activities of the shadowy online crooks who profit from spewed spam, virus-laden PCs and identity theft. The researchers estimate that the total value of the illegal materials available for sale in the seven-month period could total more than $37 million.

"Our research monitoring found that more than 80,000 potential credit card numbers were available through these illicit underground web economies," said Franklin, a Ph.D. student in computer science. However, the researchers warned that because checking the validity of the card numbers was not possible without credit card company assistance, the cards seen may not have been valid when they were observed.

Whatever the purchases, a buyer will typically contact the black market vendor privately using email, or in some cases, a private instant message. Money generally changes hands through non-bank payment services such as e-gold, making the criminals difficult to track.

To stem the flow of stolen credit cards and identity data, Carnegie Mellon researchers proposed two technical approaches to reduce the number of successful market transactions, including a slander attack and another technique, which were aimed at undercutting the cyber-crooks verification or reputation system.

"Just like you need to verify that individuals are honest on E-bay, online criminals need to verify that they are dealing with 'honest' criminals," Franklin said.

In a slander attack, an attacker eliminates the verified status of a buyer or seller through false defamation. "By eliminating the verified status of the honest individuals, an attacker establishes a lemon market where buyers are unable to distinguish the quality of the goods or services," Franklin said.

The researchers also propose to undercut the burgeoning black market activity by creating a deceptive sales environment.

Perrig's team developed a technique to establish fake verified-status identities that are difficult to distinguish from other-verified status sellers making it hard for buyers to identify the honest verified-status sellers from dishonest verified-status sellers.

"So, when the unwary buyer tries to collect the goods and services promised, the seller fails to provide the goods and services. Such behavior is known as 'ripping.' And it is the goal of all black market site's verification systems to minimize such behavior," said Franklin.

There have been successful takedowns against known black market sites, such as the U.S. Secret Service-run Operation Firewall three years ago. That operation against the notorious Shadowcrew resulted in 28 arrests around the globe, Carnegie Mellon researchers reported.

"The scary thing about all this is that you do not have to be in the know to find black markets, they are easy to find, easy to join and just a mouse click away," Franklin said.

"We believe these black markets are growing, so we will have even more incidents to monitor and study in the future," Perrig said.

That growth is also reflected in the latest Computer Security Institute (CSI) Computer Crime and Security Survey that shows average cyber-losses more than doubled after a five-year decline. The 2007 CSI survey reported that U.S. companies on average lost more than $300,000 to cyber crooks compared to $168,000 last year.