> on HN, I've seen stolen credit card marketplaces and things like that. Do people put their welfare payments on something like that?

Sometimes, yes, people sell EBT cards online (a quick googling finds numerous reports of this being done on Craigslist and Facebook.)

Othertimes, they convert benefits to concrete goods, which are then sold at below-market prices to convert into cash to by things that would not be allowed by the benefit program (or traded directly for other goods, with the seller of the other goods either using the traded goods or selling them for cash.)