October 15, 2019
ICX Card Issuer Summit Report Out – October 2019 Chicago IL
On October 1st, a group of leading professionals from the…
Authorities in the United States and Europe have shut down two huge criminal marketplace operating on the dark web, one of which officials say was responsible for more than $1 billion in illicit transactions in the last three years.
The investigations into the AlphaBay and Hansa marketplaces have been going on since last year, and officials from the FBI, DEA, Europol, and and the Dutch National Police were all involved. Authorities found the server infrastructure used by the operators of the Hansa market in the Netherlands and seized the servers there, as well as some in Germany and Lithuania. They also arrested the administrators of the market in Germany in June.
But the bigger target was AlphaBay, which officials said was the largest illegal marketplace online and was selling drugs, malware, weapons, and other illegal goods. AlphaBay allegedly included listing for more than 100,000 illegal products and served more than 200,000 customers. Authorities said the key to the success of this operation against the dark web marketplace was hitting them both at the same time.
“This involved taking covert control of Hansa under Dutch judicial authority a month ago, which allowed Dutch police to monitor the activity of users without their knowledge, and then shutting down AlphaBay during the same period. 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 said in a statement.
As part of the operation, Thai authorities arrested Alexandre Cazes, the alleged creator and operator of AlphaBay, on July 5. Department of Justice officials said Cazes committed suicide a week later while in custody in Thailand. AlphaBay was run as a Tor hidden service, a site only available on the anonymous Tor network. Justice officials said the takedown of AlphaBay was a major milestone.
“This is likely one of the most important investigations of the year. I have no doubt about that,” Attorney General Jeff Sessions said during a press conference announcing the operation Thursday.
The investigation is still going on, and officials said they have discovered an alleged AlphaBay employee who lives in the U.S.
A substantial portion of the goods sold on dark web markets are illegal drugs, especially opioids. Sessions said heroin and fentanyl were prevalent on AlphBay and pointed to several overdose deaths of U.S. citizens who had bought drugs on the site. AlpaBay and Hansa also were known to sell hacking tools and malware.
“Transnational organized crime poses a serious threat to our national and economic security,” said Acting Director Andrew McCabe of the FBI. “Whether they operate in broad daylight or on the dark net, we will never stop working to find and stop these criminal syndicates.”
In the forfeiture complaint against Cazes, the Justice Department said that investigators were able to zero in on Cazes as the alleged operator of AlphaBay thanks to a major operational security mistake: Cazes’s personal email address was included in the header of a welcome email sent to new AlphaBay users. When law enforcement agents searched Cazes’s residence on July 5, he was logged in to AlphaBay as the admin and officials also found passwords to the site’s servers on his computers, according to the complaint.
Law enforcement officials seized not just the AlphaBay servers, but also financial and real estate assets belonging to Cases, including several million dollars in various cryptocurrencies.