How dark market vendors are using Telegram bots to decentralize

Dark market vendors have found a new way to evade law enforcement: delegate the dirty work to bots. 

Previous high-profile — and since taken down — dark markets like Silk Road or DarkMarket relied on human intermediaries and escrow setups in which a third party executes the transaction only when both parties met their end of a deal.

A new dark market called Televend eliminates both the humans and the escrow element from the arrangement. Instead, Televend uses bots on Telegram to connect buyers and sellers and facilitate transactions. 

It’s not clear exactly how much cash Televend bots are dealing with at this point. But Jacob Illum, chief scientist for analytics firm Chainalysis, recently analyzed the transactions for one prominent vendor on Televend and found that its wallet received over $270,000 worth of Bitcoin since Televend’s inception in August 2020.

How it works

The way Televend works is fairly straightforward: dark market customers deal with bots instead of human vendors. Illum shared screenshots with The Block that help explain the process.

"We administer bots and run them like private shops," states an introductory message from the "Buy Drugs" Televend channel. 

Vendors do not need a Telegram account to match with customers; customers must find vendors by searching for specific bots on Televend. Buyers can narrow their vendor search based on the country of the vendor, shipping country, vendor reviews, and the last time the vendor was seen. 

Vendors control their bots and take care of orders, listings, and customer correspondence using Tor, the open-source software that allows users to communicate anonymously over the internet. In effect, bots act like the retail clerk between the customer and the vendor, controlling orders, payments, and customer feedback. 

Bots automatically invoice the customer after they place their order. Customers send payments directly to the vendor’s bitcoin wallet. Either a bot can auto-generate a new wallet for the vendor or the vendor can use a wallet address they had prior to joining Televend, according to Illum. 

All that’s left is for the customer to wait for their order to arrive in the mail.

Televend issues fees to vendors depending on their revenue. According to a screenshot provided by Illum, Televend’s web page describes their fee structure as follows: fees range from 4% for monthly revenue under $50,000, 3% for revenues between $50,000 and $75,000, 2% for between $75,000 and $100,000, and 1% for monthly revenue above $100,000. 

Fees are collected depending on sales, which Televend tracks through payments in the bitcoin wallet linked to the vendor’s bot. Vendors pay Televend directly in bitcoin, likely to a dedicated address for each individual vendor, according to Carles Lopez-Penalver, Chainalysis’s senior cybercrime analyst.

The tradeoff

Dark market decentralization has a downside, though: more fraud.

"Dark markets offer escrow and reputation systems to ensure people aren't scammed," Elliptic chief scientist and co-founder Tom Robinson told The Block. "Those same types of protections aren't there with Televend, leading to significant levels of fraud."

"Lots of scammers on there so you need to be extra extra careful," a Reddit user posted in September on the MarketTalks DW subreddit. "But I research vendors and only use those that are verified/trusted/good feedback from other sources."

The Reddit user added: "There's a group chat so scammers tend to be identified pretty quick and the good vendors sussed out."

Illum thinks decentralized dark market platforms like Televend will proliferate in 2021, since it’s easier to evade law enforcement and attacks from competing marketplaces. 

"While future decentralized markets may run on platforms other than Telegram, Televend shows that the encrypted messaging platform model can offer customers an easy buying experience."