Arkham Asylum

Intel exchange or snitch-to-earn?

Arkham Intelligence’s address-doxxing market throws open the gates of the asylum, letting loose all kinds of unknown threats...

Will we simply see ARKM pump-and-dump as guesswork is peddled as high-grade alpha?

Or will the platform turn into Fiverr for well-funded criminals looking to aquire new targets?

Price discovery for on-chain snooping will certainly be interesting to watch; but with Arkham as the central arbiter over the validity of intel-bounties, the market is ripe for manipulation.

But prospective snitches have already been given a head start…

In a master-stroke of dramatic irony, Arkham magnified an already poor reception to their doxx-to-earn programme when the ARKM airdrop was announced a few hours later.

Rather than using community greed to calm the backlash, as it was presumably designed to do, it quickly became clear they had already been doxxing their own users.

Unencrypted reflinks inviting users to the platform led to anons inadvertently leaking their email address via shill posts.

Arkham has been aware since January, and apparently didn’t care…

…looks like CEO Miguel Morel was too busy buying sunglasses.

Arkham will enable users to place bounties for on-chain analyses such as identifying addresses and tracing funds. Purchased reports remain private for 90 days before being publicly displayed on the platform.

The team have defended the move by stating that off-chain personal info won’t be traded and that the purpose is to trade market insights and identify bad actors.

But the financial incentives to snoop on regular users is impossible to ignore.

Leading by example, Arkham’s CEO bravely volunteered his on-chain info (suspiciously low activity for the main address of a “crypto fucking god”). However, this move is made out of choice, a luxury that won’t be afforded to others whose info is to be bought and sold.

Others have already used Arkham’s own tool, and their oversights, to track down Arkham-related accounts, which don’t seem to have been labelled prior to the announcement.

it's almost as if they don't want their balances and transactions to be made public record for profit without their consent

Would be a shame if anyone were to be griefed with Tornado ETH dust.

Blocking individuals out of a system only gives them an incentive to pay-off, manipulate or even kidnap others to do their dirty work for them.

The “nothing to hide nothing to fear” narrative is unsurprising given the project’s backers

And, unsurprisingly, Arkham will be data mining from its own users too.

Links to the likes of Thiel, Altman and their relentless KYC-empires of Palantir and Worldcoin can only mean one thing

A cross-referenced database between users, ‘intel bounties’ and established systems, such as Chainalysis, would create the ultimate blockchain address-book for use by three letter agencies, and potentially criminals as well.

But, even if Snitch-Fi seems a government-friendly concept, Arkham might find themselves in hot water as a US based company launching a token via an embattled exchange.

At best, “deanonymising the blockchain” will cause a race-to-the-bottom for on-chain investigators, selling what they can cobble together to alpha-seekers who’d rather pay than DYOR.

At worst, it incentivises a source of targets for those looking to outsource some of the grunt work of spearphising, or those with even more nefarious intentions.

In monetising the labelling of wallets, Arkham has opened a can of worms which may have serious potential security implications, especially if data is cross-references with the 2020 Ledger leak of customer data.

However, there also exists an element of hypocrisy coming from those happy to blindly shill blockchain as an open, fair solution to everything, but now against using that transparency to snoop on addresses.

Either way, the pseudonymity of blockchains is a bug, not a feature, when convincing new users to onboard at scale.

It will be tough to draw mainstream CEXs users away from the likes of Celsius and FTX and into on-chain DeFi whilst also expecting a level of OPSEC that even some hackers can’t manage.

Each new user will have to choose whether to abstract away these complications, accepting the consequent trade-offs, or take a different path to stay under the radar.

Are you exposed?

Let there be dark.

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