United States legal authorities last week charged Greek national Apostolos Trovias of selling insider trading tips on the dark web.
The Department of Justice and the Securities and Exchange Commission (SEC) allege Trovias allegedly used anonymizing software, as well as pseudonyms — such as “The Bull” — and bitcoin, to mask his identity.
Trovias used dark web forums as a way to troll for people willing to buy or sell insider trading information. The Dark Web, which facilitates anonymity by obscuring users’ identities, allows users to purchase and sell illegal products and services — in this case, insider trading tips.
The SEC complaint, filed in the U.S. District Court for the Southern District of New York, covers a period between at least December 2016 through early 2021.
As alleged in the complaint, Trovias claimed that the information he was selling consisted of order-book data from a securities trading firm that was provided to Trovias by an employee of the firm.
Trovias allegedly sold those “tips” through one-off sales, as well as weekly and monthly subscriptions. Trovias allegedly sold over 100 subscriptions to investors via the Dark Web over the course of the scheme.
The complaint alleges that, in addition to order-book information, Trovias sold the pre-release earnings reports of publicly traded companies.
The complaint further alleges that Trovias acknowledged to federal authorities that this information was “sensitive and more importantly illegal to use or share.”
The complaint was filed in February but kept sealed until after Trovias was apprehended. He was arrested in Peru in May, according to a filing spotted by PCMag, which notes the US government was working on extraditing him.
“Trovias’s alleged conduct was an attempt to evade detection by operating in obscure online forums,” said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. “As this case demonstrates, the SEC will continue to target misconduct wherever it occurs and regardless of perpetrators’ efforts to hide their tracks.”
The SEC’s complaint charges Trovias with violating the antifraud provisions of the federal securities laws. The complaint seeks injunctive relief, disgorgement, prejudgment interest and penalties against Trovias.
The dark web
The dark web is the World Wide Web content that exists on darknets: these are overlay networks that use the Internet but require specific software, configurations, or authorization to access.
Through the dark web, private computer networks can communicate and conduct business anonymously without divulging identifying information, such as a user’s location. The dark web forms a small part of the deep web, the part of the Web not indexed by web search engines, although sometimes the term deep web is mistakenly used to refer specifically to the dark web.
The darknets which constitute the dark web include small, friend-to-friend peer-to-peer networks, as well as large, popular networks such as Tor, Freenet, I2P, and Riffle, operated by public organizations and individuals.
Users of the dark web refer to the regular web as Clearnet due to its unencrypted nature. The Tor dark web, or onionland, uses the traffic anonymization technique of onion routing under the network’s top-level domain suffix .onion.