Prominent digital drug marketplaces knocked out in 1-2 punch
By Raphael Satter and Frank Bajak
PARIS — Two of the world’s most notorious “darknet” marketplaces have been knocked out in a one-two punch that officials say yielded a trove of new intelligence about drugs and weapons merchants that operate from hidden corners of the internet.
AlphaBay, previously the internet’s largest darknet site, went offline on July 5 and was already widely assumed to have been taken out by authorities. But on Thursday, European law enforcement revealed that a second darknet site known as Hansa had also been in police hands for the past month, an announcement deliberately designed to sow panic among tech-savvy dealers and buyers.
“This is the largest darknet marketplace takedown in history,” Attorney General Jeff Sessions told reporters in Washington, according to a prepared version of his statement. He accused online vendors of “pouring fuel on the fire of the national drug epidemic” and warned that “the darknet is not a place to hide.”
The darknet, a part of the internet accessible only through specialized anonymity-providing tools, is an attractive place for sales of drugs, weapons and other illegal merchandise. Merchants and buyers can operate with relative openness while still keeping their identities secret.
A California indictment named AlphaBay’s founder as Canadian Alexandre Cazes, saying the 25-year-old had amassed a fortune of $23 million, including a small fortune in digital currency. The indictment said he spent the money on real estate, luxury cars and the pursuit of “economic citizenship” in Liechtenstein, Thailand and Cyprus.
Cazes died in police custody just over a week ago, according to Thai police. The chief of Thailand’s narcotics police told reporters that Cazes hanged himself in jail just prior to a scheduled court hearing.
The law enforcement operation was aimed at gathering as many new leads as possible and maximizing confusion within the darknet drug-buying community, according to Dutch cybercrime prosecutor Martijn Egberts.
Egberts told The Associated Press that investigators had taken control of Hansa market and impersonated the administrators for the past month. Drug sales continued as usual as investigators logged each transaction and sent shipment details to local police forces in the relevant area. Over the course of the entire operation, he said that Dutch police were able to scoop up some 10,000 addresses for Hansa buyers outside Holland.
One of the most challenging parts of the undercover operation, Egberts said, was mediating the frequent disputes between buyers and sellers.
“It turned out to be a lot of work!” he said. “There are so many complaints. There are a lot of tickets to be watched, to be solved. The biggest effort for us was to get the site going on a way that nobody noticed it was us.”
He noted with satisfaction the online rumors he said were already swirling around about other darknet drug marketplaces. “This is the moment to show the world that you can’t trust dark markets anymore, because you never know who is the admin,” he said.
Nicolas Christin, a darknet expert at Carnegie Mellon University, said the operation was “psychological warfare.”
“It is definitely going to create a bit of chaos,” he said. “There have been takedowns in the past. … And what we’ve seen in the past is initially there is quite a bit of turmoil for like a week or two weeks and then things cool down and people move to other marketplaces that haven’t been taken down.”
Darknet sites have thrived following the appearance — and subsequent takedown — of illegal goods bazaar Silk Road.
Experts said Cazes appears to have been caught out by mistakes rather than a weakness in the underlying security technology AlphaBay used. According to the indictment, he accidentally broadcast his personal Hotmail address in welcome messages sent to new users.
The success of this operation doesn’t mean that darknet drug markets will stay down for long.
“Unfortunately, the demand for these kinds of goods and services is large enough that we will always see other dark markets rise in place of those recently busted,” said Joseph Lorenzo Hall, chief technologist at the Center for Democracy & Technology, a civil-liberties group in Washington.