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Just over 30 percent of transactions conducted from Tor (the onion router) in August ended up being fraudulent compared with an overall fraud rate of one percent for all online transactions in August, new research found.

Tor is a privacy protocol intended to help people to browse the Internet anonymously. It does so by redirecting web traffic along hard-to-follow routes and assigning web users a random IP address that can change at any time. This helps to mask users’ true geolocations and the IP addresses of their Internet-connected devices.

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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, which conducted the research. “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.”

Cyber Security

The fraud findings came after 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 ended up identified by iovation by leveraging technology it developed to correlate transactions to IP addresses that are part of Tor.

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