Home » Side event: Drug crypto markets beyond 2020: Policy, enforcement, harm, and resilience

Side event: Drug crypto markets beyond 2020: Policy, enforcement, harm, and resilience

Organized by the Government of the Netherlands, Asociación Bienestar y Desarollo (Energy Control), the Global Drug Policy Observatory and the International Drug Policy Consortium

Anke ter Hoeve, Netherlands: The Netherlands is a staunch supporter of evidence based drug policymaking. We had a side event on the matter and submitted a resolution which commanded great support. On today’s topic, there’s surprisingly little research, which is why we are delighted to be joined by colleagues. Data suggests that the purchases of drugs in crypto markets remains robust and even increasing. Thus, the results of taking down crypto-markets are subject to debate. What have we done right? Wrong? What to take into account in dealing with these markets? What have the effects been? The academics and practitioners beside me can respond some of these questions.

Martin Horton, GDPO: The advent of drug crypto-markets in the early 2010s represented a novelty for drug market. CDMs leverage online markets for international trade. Anonymous browsers, ToR, etc. reduced likelihood of detection and instances of market violence. It facilitates payment outside of the financial regulations that characterise offline approaches. They now represent an established and maturing area in drug control. In terms oft the international response…the global drug control regime has been slow in responding to changing modalities. Before 2010, it was considered an internet advertising issue (and thus considered under the 1988 convention), since then, instruments like the Convention on Corruption and resolutions on capacity building and assistance. There’s general agreement that they’re “bad” but no agreement of a common approach. International responses are adapted and built in relation to pre-existing instruments. The Conventions have been coopted to produced an eclectic approach towards the issue at the international level. The takedown by the FBI of Silk Road, in Oct 2013, successfully removed the first major market; but generated offline and online media interest. It rather served to increase public awareness and traffic to subsequent markets. Effects of enforcement? Takedown strategy. The seizure and closure had short-term im,pacts. Users migrated. Overall volume (estimated by feedback) suggest that sales returned to pre-bust levels within 4 months. After 2014 Operation Onymous, recovery time in half and 2 months exceeded pre-bust levels. Alphabay and Hansa technically and strategically improved. Overall trade recovered within a month and in a matter of week when Hansa. Market and user participation recover faster from disturbances and markets grow more profitable. A secondary consequence, takedown creates market innovations, which increases the sophistication of the market and their resilience. One study for instance showed that it accelerated escrow technologies. The lifespan of individual markets is short lived, but the ecosystem is resilient. Netherlands is a global leader on takedown, high tech crime unit, Europol action task force chairing, instrumental in evolving and increasingly nuanced and innovative approach. Rather than immediate takedown, the Dutch approach focuses on undermining trust in the market through inflilatration (specialised unit), embedding enforcement agents within the online population. Ep. Operation ???. Strategic shift in enforcement practice. Hansa operation. Once the largest in Europe. 24000 public listings. Smaller trade in fraud and other tools. Netherlands identified 2 administrated in Germany and conducted arrests. Real time copy of the market in their jurisdiction which helped them survey merchants, they altered the site’s code to get IDs, convinced vendors to open a beacon file in their computer to show addresses. In February 2018, ToR cooperation targeting customers and vendors using the markets. Netherlands pioneers and intelligence led approach that seeks to collect real time intelligence rather than shutting down. Ultimately taking them down, but exemplifies evolved practices in law enforcement to undermine trust and confidence. An improvement o the successes (illusory) of takedown (although they are taken down ultimately). Previous takedowns have been an important learning point. Recent enforcement suggests that takedowns are not enough to destabilise the trade. Purchases remain robust and increasing in Europe. Dutch approach has positive effects because it also contributed to self regulation: some markets removing substances considered particularly negative. Forums say they’re also motivated by the negative perception of users of such substance, particularly fentanyl. Voluntary takedowns, like DreamMarket, show the Dutch approach might work in different ways. But understanding how and why the Dutch approach is more effective is key to better respond to challenges. Analysis of the increasing body of academic research shows there are also unintended consequences related to takedown. Plausible that, like offline interventions, disrupting have less than optimum effects. International position is about engagement with evidence with academic community and help maximise positive effects. Constructing a nuanced approach that is UN-led might be a significant next step to reduce less desirable consequences of takedown. In terms of harms. Unknown content of drugs sold is a key causal of harm. Fentanyl, for instance. Drug harm derives from circumstances in which illicit markets are sold (Stateless activities where buyers and sellers resolve dispute themselves). The illegality of the market makes disorder and violence rather inevitable. Whats the effect of CDMs on this? Cannabis, MDMA and psychedelics account for nearly 62% of the market trade. Survey research confirms this. The substances typically associated with problematic drug use are far less commonly traded in these market. Buyers are younger and technically adept and as a consequence purchase need to be made with days in advance, so people who experience problematic uses might not be particularly keen on using these platforms.

Fernando Caudevilla, Energy Control / Dr X.: CDMs are places with an administrator interacts with vendors and users. In the last year, there has been an increasing popularity; albeit they represent a fraction of the global trade. It does show potential to grow. Law enforcement activity has shown not to lead to sustained reductions in CDMs. There’s little research but the limited research suggests this. We are going to talk about harm reduction. But we don’t want to suggest harm reduction is opposed to law enforcement. They’re different and even complimentary. CDMAs can create a senses of community. They gather in forums where people communicate, so there’s an interesting feeling of belonging. The ethics, rules and codes in CDMs are particular. Some cryptomarkets explicit prohibit the sale of child pornography, or mass assault weapons. Communication is important in these spaces. They’re based in trust and reputation. And that’s the great idea of Silk Road. We tend to think people who use drugs and who buy drugs are miserable, criminals, deviants; but the fact that these spaces are based on trust tells us a different story. People seek to increase and maintain trust. These are market models based on people, not machines; worth remembering this. Is there a chance for harm reduction in CDMs? Our experience of seven years is different. We don’t want to suggest this is a Hello Kitty world. But within the market, together with criminal activity and damaging interactions, there’s also other more positive aspects. Energy control provides a range of harm reduction services, including drug checking. It’s not to tell people which pill is good or bad. It’s a tool to contact people who use drugs, provide information, have it disseminated and know about the … My personal journey is that I decided to offer a place to advice people, give information that is reliable. I used my name, which helped build trust and the administrator welcomed this and highlighted it. I answered hundreds of questions and this work was replicated in other markets in 2015. This was useful to create this character of Dr X. Because it meant that there was trust in reputation centred around this character, that was appreciated in the community. That paved the way to build the Energy Control’s international CDM brand, we are knowledgeable of these spaces. The administrator of Silk Road suggested sending us samples so that we could alert about negative vendors. But this could entail accusations of cooperation so we dismissed it. We chose a different one: work directly with users. Users send the samples and we send the result. This is how our usual service works. These users are in specific forums that we follow/monitor. In dread, for instance, users discuss their experiences. We have been allowed by the administrators to create the forums, which agreed to share the drug checking alerts to all users. It’s an ideal way to inform people and reduce harms. IN terms of highlights and results. IN five years, Close to 6 thousand samples. 300 different substances. In general, it shows that these markets are alike other competitive markets. But there are some exceptions. At a certain point in time, we detected 10 fentanyl samples. We decided to publish immediately because it was the first time this happened in Europe. We had clear and irrefutable evidence about the vendors. I contacted them. The administrator. And then the vendor was banned immediately. A few months later, the Gren market says they would remove fentanyl. There is potential in this. Which shows administrators have potential to boost harm reduction. Since we published the alert we haven’t found heroin-tainted fentanyl. In the last years, most CDMs have banned fentanyl and fentanyl derivatives. There’s only one offering pharmaceutical-grade products. This is to say that we need to nuance our narratives around CDMs and the responsibility of administrators. We found alprazolam in amphetamine. We launched an alert, because the situation was worsening… After the alert, the problem disappeared. We have received messages of vendors spontaneously saying they would discard their products. Vendors mention our results because some are using our results. Some use this to promote themselves. But they provide also fake information. So it’s our work to contact administrators and avoid this. So we have a thread to discuss this with vendors about what harm reduction by vendors .

Judith Aldridge, University of Manchester

Patrick Shortis, University of Manchester


Trimbos: The CDMs come and go. The forums are taken down. How do we deal with that?
Fernando: It depends on the situation. When there is a main CDM, I was in the forum. Now there’s a big forum ON CDMs, rather than IN the CDM itself. The forum exists in darknet.

Ministry of Helath, Netherlands: We use the regular internet for harm reduction some times. How to get the proper message to the proper target group. Putting information on the internet, about crystal meth, for instance, you give too much information to too many. Is this an issue in the darknet? How do you target? Who’s the population?
Fernando: Online advice has positive aspects. But it has limitations too. And it’s important to be conscious. You cannot provide the same kind of information and you have to be really careful with what you say. Online advice can be contraindicated. It’s a tool for concrete people who want to know concrete information. Short answers. I’m a health professional and people tend to ask us about cancer, diabetes…not so much about drugs because they don’t want to be judges. Ethical questions, though. Can we help a person by methadone to detox for heroin and explain how to do it online? Maybe in Europe it’s a bad practice. But in some places, there’s no methadone. If I get asked publicly, I would answer.

Dave Bewley Taylor, Swansea University: This is a new topic. What are the methodological challenges?
Judith Aldridge: Data collection strategies can be used to address questions about the use of CDMs. Two main ones: data collected directly from markets from the point of view of drug policy scholars, I sthat they are unbelievably rich because information is connected to actual purchase. Every purchase is associated with a date, substance, price, feedback, where the drug was sent from, sometimes where it was sent to, the vendor. This is way more detailed than the information of offline markets. And we have trend information. And these are many million purchases. SO that’s one source of information. Second, self-report data from people who answer questions in Survey. The biggest one n this regard on CDMs is the Global Drug Survey, 130000 people took part. Very large. Number of people initially 4000, it has gone up. We’re able to consider relative harms, ask people about violence and disorder. People report their experiences of threats and violence and compare online and offline; substantially less in CDMs, even compared to buys from friends. Drug policy researchers need to consider unintended consequences of policy approaches utilised today. There is limited success in takedowns, but what are the net effects? On drug harms, on violence and disorder. Forcing people offline might have unintended negative effects.
Fernando: We have a lot of data and it is important for us to have time to professionally create programmes and evaluate the impact. But for this we need resources. I am here talking on a voluntary basis. WE ask for fees to analyse the samples. This cost is low because a lot of people volunteer. We need more time to evaluate and consider these approaches.

Moderator: We hear you’re collecting data and what works and what not. You need money to collect better data and evaluate. It. There are people from ministries of justice and health in the room. What advice looking at what we discuss today.
Fernando: My advice is for them to listen and enter in dialogue with experts in the field. And leave your prejudice at the door. No tall vendors and administrators are evil. To interact with them isn’t cooperating with drug trafficking. That’s like thinking giving condoms to sex workers is cooperating with human trafficking…it makes no sense.

Martin: If you have limited skills and resources to counter crypto-markets of all sorts, dedicating them to CDMs might not be the most harm reducing.
Judith: Harm reduction tends to be thought as interventions for individuals to be safer from harm. But harm reduction can be thought about market intervention.s Focus on less well regulated markets, focus on substances that are associated with high levels of harm,
I would also say that we need to think at what you’re driving markets towards. Open Bazaar, no centralisation, more people scammed, no oversight mechanism, no connection to vendors and suers in mass, what direction we’re policing this towards.

Trimbos: We see this exactly. More people buying in telegram, for instance. And its’ much harder to reach those dealers.

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