Ryan Duquette, a digital forensics expert and partner at EY Canada who used to work in law enforcement himself, says police are putting a lot of resources toward taking down marketplaces on the dark web, but it can be a bit like playing whack-a-mole. They hailed Operation RapTor as a major leap forward in tackling sophisticated criminal outfits that try to hide their fentanyl and opioid sales under the veil of dark web anonymity. In the long term, the RAKS bust is a significant catalyst for further regulatory scrutiny and standardization globally. As legitimate use cases flourish and regulatory clarity emerges, this crackdown on darknet activities will help differentiate the ethical applications of blockchain from its misuse, fostering greater trust from traditional financial institutions and mainstream investors.
- Historically, DNMs have been known for the illicit drug trade, but in recent years have differentiated themselves with unique service offerings.
- This massive undertaking stretched across four continents, with investigators working together in countries like the United States, the United Kingdom, Germany, Brazil, and South Korea.
- Darknet markets were one of two categories of crypto crime that saw revenues rise in 2023.
- The U.S. Attorney’s Office for the Eastern District of California is prosecuting the case.
- As Monaco noted Tuesday, the dark web drug racket was already a billion-dollar industry before the pandemic drove it to new heights.
- DeSnake claims to be located in a non-extradition country, beyond the reach of US law enforcement.
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“It provided us with all the information which led to the identification of those arrested today,” says Europol press officer Claire Georges. “We collated the information and then we sent out what we call intelligence packages to all the concerned countries. Basically it’s information or documents where we say, look, we know this person in your country has done this, you may want to open an investigation.” Georges says also that there are more arrests to come.
Arrested In Global Crackdown On Dark Web Drug Market
After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice. Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine and alprazolam. These actions were part of a coordinated effort among US government agencies and foreign counterparts to combat Russian illicit finance. In September 2024, the US Secret Service’s Cyber Investigative Section, Netherlands Police, and the Dutch Fiscal Intelligence and Investigation Service (FIOD) seized web domains and infrastructure linked to UAPS, PM2BTC, and Cryptex. Below is a screenshot from the Abacus Market website showing the range of items it sells, with drugs and chemicals representing the overwhelming majority of its products.
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“I’m distrustful of DeSnake, and I think across the communities there’s a general distrust.” Of course, everything DeSnake told WIRED may itself be misdirection designed to help him further evade those agencies. Its rules have always banned the sale of data stolen from victims in former USSR countries, a common prohibition among Russian hackers intended to shield them from Russian law enforcement scrutiny.
Treasury’s OFAC in its first action as a J-CODE member for operating Nemesis Market, a darknet platform that sold opioids and concealed profits through crypto wallets. TRM Labs previously reported that 97% of Chinese chemical vendors surveyed accepted crypto, revealing how stablecoins have become critical infrastructure for global trafficking networks. The Dutch national police’s Cyber Enabled Crime Team was involved in the operation, codenamed SpecTor. One defendant in California led an organization that bought fentanyl in bulk, pressed it into pills with methamphetamine and sold millions of pills to thousands of people on the dark web, he said.
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Hydra vendors also offered a robust array of money laundering and so-called “cash-out” services, which allowed Hydra users to convert their bitcoin (BTC) into a variety of forms of currency supported by Hydra’s wide array of vendors. In addition, Hydra offered an in-house mixing service to launder and then process vendors’ withdrawals. Mixing services allowed customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Hydra’s money laundering features were so in-demand that some users would set up shell vendor accounts for the express purpose of running money through Hydra’s bitcoin wallets as a laundering technique. This case was, in part, investigated by HSI New York’s El Dorado Task Force, a money laundering task force comprised of more than 200 law enforcement personnel representing approximately 35 federal, state and local law enforcement and regulatory agencies.
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Customer reviews found on the Abacus site indicate that some of its American vendors sell drug products laced with fentanyl. When it comes to cybercriminal enablement, markets like Kraken Market, the DNM Aggregator, and Exploit.in are go-to services, providing bad actors with tools to carry out ransomware attacks, hacks, and more. Kraken Market also captured the largest share of transfers potentially sent for the purpose of obfuscating funds, as well as buying illegal products. In addition to that activity, markets like these host vendors that advertise their own cashout or swapping services, resulting in tens of millions of dollars in laundered funds. Cybercrime enablement represents flows from ransomware, stolen funds, malware, or fraud shops to darknet markets. Darknet markets were one of two categories of crypto crime that saw revenues rise in 2023.
He even claims that AlphaGuard will automatically hack other websites and plant data on their servers to give users “withdrawal codes” they can use to save the cryptocurrency they’ve stored on AlphaBay in case of a takedown. “It is a system to ensure users can withdraw funds, settle disputes, and generally go without a cent lost if raids happen,” DeSnake writes, “even if it happens on all servers at the same time. It is unstoppable.” A kind of practical paranoia permeated DeSnake’s messages to WIRED, both on a personal level and in his plans for AlphaBay’s revamped technical protections. AlphaBay’s dark web site is now accessible not only via Tor, like the original AlphaBay, but also I2P, a less popular anonymity system that DeSnake encourages users to switch to. He repeatedly described his wariness that Tor may be vulnerable to surveillance, though he provided no evidence.
“Other marketplaces will take advantage of this and they might have an increase in traffic to their marketplace,” he said. Criminals will often use cryptocurrency on the dark web in an to attempt to conceal identities and financial trails, the RCMP said in its release. The RCMP executed several search warrants, which led to the seizure of 75 kilograms of various narcotics, including cocaine, MDMA, meth, heroin and ketamine, it said in a news release Thursday. Adding another layer of pressure, the Office of Foreign Assets Control (OFAC) also slapped sanctions on Iranian national Behrouz Parsarad, identified as the operator of the Nemesis marketplace.
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“There’s got to be somebody who’s very proficient in technology, security and forensics to go and be able and track these people.” “There’s a lot of groundwork … that goes into this type of operation. Usually it’s not just a local or regional matter, it’s a global matter,” he said. According to the news release, data analytics found that “RoadRunna” is a sophisticated Canadian criminal enterprise that shipped approximately 400 packages weekly across the country.
Incognito Market included “many features of legitimate e-commerce sites such as branding, advertising, and customer service,” the Justice Department said. It’s thought the administrators made off with members’ funds, leaving customers’ wallets empty and vendors needing to rebuild their shops somewhere else. Of those arrested 119 were based in the US, two in Canada, 42 in Germany, eight in the Netherlands, four in the UK, three in Austria and one in Sweden.
Monitoring global regulatory harmonization efforts, the development of Central Bank Digital Currencies (CBDCs), and geopolitical events will be crucial, as these factors can significantly influence market sentiment and project viability. As far as financial recourse for victims, some banks and insurance companies have provided payouts and will include those funds as damages in lawsuits against Genesis Market cybercriminals. As for Genesis Market cybercriminals located in the Netherlands, three have already been convicted and received prison sentences considered severe for that jurisdiction.
The operation called SpecTor by US, British, Brazilian and European law enforcement also netted almost a tonne of drugs and 117 firearms, Europe’s policing agency said. “Waste your resources on seizing petty websites because they know the use of darknet services is ever growing,” another user wrote. Taken together, those operations represent the most far-reaching collection of law enforcement actions against the dark web’s economy in at least two years. “You’re seeing the evolution of a coordinated law enforcement effort,” the director of Europol’s European Cybercrime Centre said. Earlier today, a New York man was resentenced to three years in prison for his creation and operation of BreachForums, a marketplace for cybercriminals to buy, sell, and trade hacked or… Described by blockchain firm Elliptic as “the most prolific crypto-fueled black market ever seen online,” Haowang Guarantee trafficked in laundered USDT, fake IDs, and tools for industrialized fraud, often exploiting victims trapped in scam compounds.
In addition to fentanyl, the presence of nitazenes in the global supply of dangerous synthetic opioids has increased, and China-based vendors have established themselves as the initial source. The US and Europe have seen an increase in nitazine-related overdose deaths in recent years, perhaps due to the halt in the heroin supply following the Taliban’s crackdown. Due to the novelty of these substances (and the fact that many are analogs) the true number of overdoses in Europe could be higher, as forensic drug testing may lag behind the pace of the crisis. The FBI tied Taiwanese national Rui-Siang Lin, Incognito’s operator, to the DNM’s website by tracing crypto transfers to an exchange account in Lin’s name. Lin was charged with a host of crimes, and by May, federal authorities in New York had arrested him. The Justice Department said more than 100 federal operations and prosecutions had been made in the U.S.
