CRTC Investigation Leads to CASL Penalties and Closing of Dark Web Marketplace

On January 26, 2022, the Canadian Radio-television and Telecommunications Commission (CRTC) announced that Dark Web marketplace Canadian HeadQuarters (CanadianHQ) was taken offline following the CRTC’s execution of warrants. The CRTC’s Chief Compliance and Enforcement Officer also announced penalties totalling $300,000 to four Canadians for their involvement in CanadianHQ.

The Dark Web refers to a set of webpages that cannot be indexed by search engines, are not viewable in a standard web browser, and require specific means (such as specialized software or network configuration) to gain access. Dark Web marketplaces facilitate the sale of illicit goods and services and provide anonymity for users.

The CRTC noted that prior to shutting down, CanadianHQ was “one of the largest Dark Web marketplaces in the world and significantly contributed to harmful cyber activity in Canada”. CanadianHQ specialized in the sale of goods and services such as spamming services, phishing kits, stolen credentials, and access to compromised computers, and enabled purchasers to engage in malicious activities.

The CRTC’s investigation focused on “four individuals who allegedly sent emails mimicking well-known brands in order to obtain personal data” including credit card and banking information. The CRTC issued Notices of Violation to each of the four individuals and $300,000 in overall penalties for sending commercial electronic messages without consent in violation of Canada’s anti-spam legislation (CASL). The CRTC issued the highest penalty—$150,000—to the creator and administrator of CanadianHQ for allegedly aiding in the commission of numerous violations of CASL by the platform’s vendors and customers.

Lastly, the CRTC stated that it also identified a number of other vendors in the course of its investigation, and that enforcement actions will be taken against such vendors in the near future.

Summary By: Steffi Tran