Darknet markets shut down in twin busts
July 20, 2017
US and European police announced on Thursday that they were responsible for the shutdown of two massive darknet marketplaces, AlphaBay and Hansa Market.
When Alphabay mysteriously went down earlier this month users suspected it was the result of law enforcement, with the news confirmed by the Wall Street Journal later that month.
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The first shutdown sent shockwaves through the darknet community, with many users fleeing to the rival Hansa Market. But in a dramatic twist on Thursday, authorities also shut down Hansa Market, and announced they had been running it for the past month.
"The darknet is not a place to hide," US Attorney General Jeff Sessions said at a Washington news conference announcing the action.
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Sessions said AlphaBay and Hansa had tens of thousands of sellers of deadly drugs like fentanyl and other illicit goods serving more than 200,000 customers worldwide.
"This case, pursued by dedicated agents and prosecutors, says you are not safe, you cannot hide. We will find you, dismantle your organization and network, and we will prosecute you," Sessions said in a warning to darknet entrepreneurs.
According to Europol, AlphaBay was the largest criminal marketplace on the darknet, with more than 200,000 users and 40,000 vendors. It had more than 250,000 listings for illegal drugs, and over 100,000 listings for stolen and fraudulent identification documents, counterfeit goods, malware, hacking tools, firearms, and fraudulent services.
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It estimated there had been more than $1 billion (860 million euros) worth of transactions on the site since its creation in 2014.
Europol said Hansa was the third-largest criminal marketplace on the darknet, and traded similarly high volumes in illicit drugs and other commodities.
Seizure of Alphabay
Operation Bayonet led by the FBI and DEA, meanwhile identified the alleged creator and administrator of AlphaBay, a Canadian citizen in Thailand. Thai police seized millions of dollars of assets and arrested the young man on July 5.
Alexandre Cazes was due to be extradited to the US on charges of racketeering, narcotics distribution, identity theft, transfer of false identification documents, device fraud, trafficking in device making equipment, and money laundering, according to the Justice Department. Cazes was later found hanged in his cell in a presumed suicide.
Read more: Alleged operator of Alphabay Alexandre Cazes found dead in Thai prison
Alphabay was shut down and authorities seized millions of dollars worth of cryptocurrencies, which were used in transactions on the site. Europol confirmed that its servers in Canada and the Netherlands were seized.
The seizures were deliberately coordinated to inflict the maximum possible damage to darknet trading platform users.
"It meant the Dutch police could identify and disrupt the regular criminal activity on Hansa but then also sweep up all those new users displaced from AlphaBay who were looking for a new trading platform," Europol wrote in a statement. "In fact they flocked to Hansa in their droves, with an eight-fold increase in the number of new members of Hansa recorded immediately following the shutdown of AlphaBay."
FBI Acting Director Andrew McCabe said AlphaBay was ten times as large as Silk Road, a dark website the agency had shut down in 2013.
"The so-called anonymity of the dark web is illusory," said Acting Administrator Chuck Rosenberg of the DEA. "We will find and prosecute drug traffickers who set up shop there, and this case is a great example of our commitment to doing exactly that. More to come."
Seizure of Hansa Market
Users of Hansa Market were greeted with a message on Thursday saying the domain had been seized by law enforcement.
"The gig is up folks, they're going balls to the wall," Reddit user OlympusXans posted in a forum dedicated to darknet markets.
"I literally just found the perfect deal for (Xanax) bars, texted a bud to see if he wanted, and when I went to refresh I got the same message about the site being seized," fellow user Elchapo1017 wrote.
Dutch authorities first started investigating Hansa in 2016, leading to the arrest of its two administrators in Germany and the seizure of servers in the Netherlands, Germany and Lithuania.
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The Dutch National Police actually seized control of Hansa on June 20, but continued running the site to covertly monitor the platform until it was shut down a month later.
"In the past few weeks, the Dutch Police collected valuable information on high value targets and delivery addresses for a large number of orders. Some 10 000 foreign addresses of Hansa market buyers were passed on to Europol," Europol said in a statement.
The operation was similar to a controversial case in the US where authorities seized a child porn darknet site and continued to run it for two weeks at an increased capacity to ensnare more users.