The Role of Law Enforcement in the Regulation of Cryptomarkets (and the Limited Role of Deterrence)

This chapter offers an extensive overview of law enforcement interventions against cryptomarkets and their measurable impact on the dark web ecosystem thereafter. In short, an overview of the history of cryptomarket takedowns is undertaken, detailing the deterrent and preventative efficacy of these interventions while offering a set of suggestions on how law enforcement might successfully intervene against cryptomarkets. This chapter offers key insights into how law enforcement approaches cryptomarket interventions, how actors on the dark web readjust their operations in the wake of disruptions and the implications of this dynamic for the overall dark web ecosystem in the medium and long term. To this end, this chapter discusses law enforcement’s fragmentation of the dark web ecosystem and inadvertent improvement of post-intervention criminal efficiency. These themes offer insights not only into the cat-and-mouse game played by law enforcement and cybercriminals but the increasing deficiencies of law enforcement entities despite their actions in this sphere. The clear conclusion is that law enforcement entities seeking to disrupt cryptomarkets should aim for more calibrated approaches and interventions which, at minimum, consider the extant evidence of success a priori while also determining the potential second-order effects of their actions. Given the increasing sophistication of cybercriminals and the inexhaustible need for illicit and controlled substances, law enforcement might opt to curtail the growth and influence of cryptomarkets instead of shutting them down entirely.