How The Underworld’s Amazon.com, Inc. (AMZN) And eBay Inc (EBAY) Works

Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY) are the biggest names in electronic commerce in the U.S. but there exists a counterpart of these companies which sole purpose is to serve the underworld.

In a special report from CNBC, internet security expert Joseph Steinberg and CNBC contributor Dina Gusovsky discuss the illicit marketplace where criminals can log on to and buy merchandize ranging from illegal drugs, stolen credit card to weapons.

“Online, there are no rules. Let’s call it the Amazon.com, Inc. (NASDAQ:AMZN) or the eBay Inc (NASDAQ:EBAY) of illegal goods,” Steinberg said before he demonstrated how this marketplace works.

Much like Amazon.com, Inc. (NASDAQ:AMZN) or eBay Inc (NASDAQ:EBAY), access is through the Internet but it is not as simple as using regular browsers such as Firefox, Chrome or Internet Explorer and going to a website.

The internet security expert says users of these illegal marketplaces use the Tor browser and Tor network for browser. The particular marketplace the duo discussed is called Evolution which can only be accessed via the Tor network. Like its legal counterparts, it’s a marketplace that has user ratings and of course posts of merchandize.

While regular money is used when one purchases goods on Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY), Evolution purchases can only be made through bitcoins.

The problem with this is that bitcoins are hard to trace because not every single bitcoin user profile corresponds to one person. Furthermore, using the Tor network, people can anonymize not only their identity but also their location as Steinberg and Gusovsky demonstrated.

“Someone could be using a tablet in a Starbucks or wherever on Wi-Fi and doing all sorts of things and look like they’re from halfway around the world,” Steinberg said, adding that this makes is “incredibly difficult” for law enforcement to identify criminals and locate them.

The irony, Gusovsky said, is that the Tor network was started by funds from the U.S. government to help protect their operatives in the field. It seems the system has been subverted by criminals for their own use.

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Ken Fisher’s Fisher Asset Management owned about 2.46 million Amazon.com, Inc. (NASDAQ:AMZN) shares by the end of the third quarter of 2014. Also by the end of that period, Carl Icahn’s Icahn Capital LP owned about 45.83 million eBay Inc (NASDAQ:EBAY) shares, an increase of 45% compared to their holdings in the e-commerce giants the preceding quarter.