Cybercrime

Study Shows 30 Percent of Transactions Conducted From Tor Are Fraudulent

According to a recent study conducted by iovation, a Portland, Oregon-based provider of online fraud protection solutions, 30.2 percent of transactions conducted from Tor in August were fraudulent.

This compared with an overall fraud rate of 1 percent for all online transactions in August, the company said.

<p><span><span><strong>According to a recent study conducted by <a href="https://www.iovation.com/" target="_blank" rel="noopener">iovation</a>, a Portland, Oregon-based provider of online fraud protection solutions, 30.2 percent of transactions conducted from Tor in August were fraudulent. </strong></span></span></p><p><span><span> This compared with an overall fraud rate of 1 percent for all online transactions in August, the company said. </span></span></p>

According to a recent study conducted by iovation, a Portland, Oregon-based provider of online fraud protection solutions, 30.2 percent of transactions conducted from Tor in August were fraudulent.

This compared with an overall fraud rate of 1 percent for all online transactions in August, the company said.

Tor is a privacy protocol that enables people to surf the Internet anonymously by redirecting web traffic along hard-to-follow routes and assigning web users a random, frequently changing IP address. This helps to mask users’ true geolocations and the IP addresses of their Internet-connected devices.

According to Tor metrics, more than 1.5 million people use Tor every day as of early September 2013, up from 500,000 a day in early August 2013.

“Cybercriminals are always looking for ways to fly under the radar,” said Scott Waddell, Chief Technology Officer at iovation. “While Tor on its surface appears to be for the greater good, it is disproportionately used for fraudulent and abusive transactions. Of note, Tor use more than doubled in August, likely due to a massive botnet leveraging Tor for command and control communications.”

During its study, iovation analyzed 240 million transactions conducted in August 2013 originating from the 1.5 billion devices it has in its device reputation database. Transactions utilizing Tor were identified by iovation by leveraging technology it developed to correlate transactions to IP addresses that are part of Tor, the company said.

Just last month, researchers from Trend Micro discovered a connection between a variant of the Mevade malware and a sudden surge in the number of Tor users. As it turned out, the Mevade sample analyzed by Trend Mciro downloaded a Tor component on infected computers, possibly as a backup mechanism for its command and control communications.

Late last year, Researchers from Rapid7 and the Shadowserver Foundation discovered a botnet comprised of thousands of endpoints that was able to operate without detection for months by utilizing TOR software.

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In addition to releasing the finding from its Tor study, iovation announced the general availability of a new capability for its fraud-fighting Reputation Manager 360 service that enables online businesses to expose devices leveraging Tor for transactions, a feature that is generally available to iovation customers immediately. 

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