WASHINGTON (AFP) – US and European police on Thursday (July 20) announced the shutdown of two huge “dark web” marketplaces that allowed the anonymous online trade of drugs, hacking software and guns.
Underground websites AlphaBay and Hansa Market had tens of thousands of sellers of deadly drugs like fentanyl and other illicit goods serving more than 200,000 customers worldwide.
AlphaBay, the largest dark web market, had been run out of Thailand by a 25-year-old Canadian, Alexandre Cazes, who was arrested two weeks ago. It had filled the gap left behind by the notorious Silk Road online market, shut down by authorities in 2013.
Since then AlphaBay had grown to ten times the size of Silk Road, offering more than 250,000 listings for illegal drugs and toxic chemicals, and 100,000 advertisements for guns, stolen and fraudulent personal documents, counterfeit goods, malware and computer hacking tools, according to the US Department of Justice.
AlphaBay’s shutdown in early July sent traffic flooding into the smaller Hansa marketplace. But the tens of thousands of users that flocked to Hansa were unaware that Dutch police had already secretly taken control of the market’s server, giving them the ability to identify and track buyers and sellers of illicit goods.
Netherlands police said Thursday they had recently arrested Hansa market’s administrators, and had this week arrested a key vendor on the market as well.
Officials said shutting down the two markets and the arrests of the administrators had enabled them to collect extensive intelligence on buyers and sellers, including criminal gangs. Their names were being distributed to law enforcement in 37 countries.
They also seized millions of dollars’ worth of digital currencies like Bitcoin used exclusively on the websites.
“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,” US Attorney General Jeff Sessions said in a warning to dark web entrepreneurs.
“This operation is an example of the improving concerted ability of law enforcement to strike against criminals, even on the dark net,” said Europol executive director Rob Wainwright.
“This coordinated hit against these two marketplaces is just a taste of what is to come in the future.” .
According to a US indictment opened Thursday, Cazes created AlphaBay in July 2014 to host, via the anonymizing Tor network, a wide range of illicit trade and money laundering. It required users to trade in digital currencies, which helps mask identities. AlphaBay took a commission on all transactions, earning Cazes tens of millions of dollars, the indictment said.
Thai police arrested Cazes on July 5, discovered his laptop open and logged onto the server that hosted AlphaBay as the administrator.
By seizing the unlocked, unencrypted computer, authorities gained access to passwords used by Cazes, and to all the information and cryptocurrencies on the AlphaBay server.
Last week Cazes was found dead in a police cell in Thailand, with authorities saying he had hanged himself with a towel. Police seized a Lamborghini, a Porsche, three houses and a hotel in Thailand owned by Cazes and his wife, as well as accounts scattered across Thailand, Switzerland, Cyprus, and Antigua.
According to the indictment, investigators found a file on his computer saying his net worth was more than $23 million. The documents also showed that he had gained citizenship in Antigua and was seeking the same in Cyprus via significant investment in real estate.
Netherlands police said they were able to gain control of the Lithuania-based server for Hansa in June after arresting the two administrators, who they said were from Germany.
They transferred the market to Dutch servers and operated it for weeks, collecting messages between buyers and sellers, whom they say mostly traded drugs.
The number of vendors rose eight-fold after AlphaBay closed, with transactions hitting 1,000 a day.