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Dark Web and Data Breaches

dark web and data breaches

“Data is a precious thing and will last longer than the systems themselves.” – Tim Berners-Lee, inventor of the World Wide Web.

In today’s world, corporations realize that data is currency and leave no stone unturned to protect it. Companies are spending millions of dollars to protect private customer information from hackers, but hackers have become increasingly sophisticated; hence, the number of data breach cases has surged in recent years.

Statistics show the number of data breach incidents that exposed credit and debit cards have increased by 169% in the last five years. It’s also estimated that fraudsters have stolen over a hundred billion dollars in the last six years from consumers and corporations. This presents a huge opportunity for companies like XOR Data Exchange to grow their data-as-a-service business by assisting organizations fight fraud.

The dark web is that part of the internet that requires special software to access and allows users and website operators anonymity. The identity and geolocation of the user cannot be tracked because of layered encryption systems. Thus, communication and transfer between users are kept confidential, and it’s usually impossible to identify the source of information. This has led to the dark web becoming a den of illegal activities with trade in stolen consumer data at the top of the list.

Lumen and E-commerce Partnership

After tasting considerable success with its last product, Compromised Identity, XOR Data Exchange is ready to roll out its new offering Lumen, specifically developed to “to seek out consumers’ personal information on the internet including non-indexed dark web sites that traffic in stolen data and prevent it from being used to perpetrate identity theft and fraud.” The underlying matrix of Lumen is similar to that of Compromised Identity. Through Lumen, XOR Data Exchange is able to discover stolen data available on the dark web and determine whether the data is being used for any kind of fraud.

When Lumen identifies compromised data, XOR Data Exchange automatically includes it in Compromised Identity Exchange. The two products then cross-leverage each other’s strengths. The insights are used to prevent fraud and identity theft.

XOR Data Exchange is also introducing a free product for e-commerce companies based on the Compromised Identity Exchange model. The solution will help e-retailers identify how many data breaches they’ve had, if data is being used to commit fraud, and if particular data is available for sale on the dark web. This allows the company to build insight into specific customers and identify compromised credentials in order to stop them from committing fraud.

Lumen in Numbers

Since formally launching Lumen in May, the company has collected 1.8 billion records from the dark web.

Acquiring this data is not easy. XOR Data Exchange uses a crawler to pull down the data. During the process of selling the breached data, hackers have to make a sample copy, and that too is pulled down by Lumen. The target zone is emails and login addresses, which are hacked to get into bank accounts.

It charges companies on the basis of the number of transactions. The charges depend on the volume and, usually, the cost varies from 0.50 cents to $2 per record. The company sells this service  as an anti-fraud product rather than as a credit product.

Funding and Future Services

XOR Data Exchange wants to develop a product that can help a consumer to know if their information is compromised on the dark web. Products like, which cater to this problem are not that comprehensive, therefore, founders want to develop a combination of XOR and credit bureau products to provide customers an effective solution to the data breach problem.

XOR has been able to raise funds in all investment climates. More importantly, its business is not especially capital intensive. The company focuses on customized products for clients and doesn’t need prior funding for development efforts. They were able to secure $2 million in an extended Series A round at the beginning of this year. In 2015, they secured $8 million in two rounds of funding ($1.8 million seed and $6.2 million Series A)

XOR Data Exchange in the News

XOR Data Exchange roped in former FICO CEO Larry Rosenberger as an investor and board observer. Rosenberger’s expertise in implementing data and analytical models will help XOR achieve the gold standard in fraud mitigation.

The company has also entered a partnership with Zoot Enterprises for offering its suite of products to Zoot clientele.


Dark web and data breaches are a reality in today’s digital-first world. With consumer personal information being saved by multiple entities from banks to e-retailers, personal data is at perpetual risk.

It is vital how corporations deal with a data breach, both internally and as a peer or associated party. How companies deal with external data breaches is also critical as users tend to have same credentials on multiple platforms. This creates an opportunity for hackers to leverage information to attack multiple websites with the same stolen data set. XOR, with its proprietary technology, understands the risk and is developing the next level data technology and networks to create a potent fraud mitigation mechanism.


Written by Heena Dhir.


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