The German Federal Crime Police Office (BKA) said on Tuesday that it has taken down the server infrastructure for the Russian darknet marketplace Hydra, seizing €23 million ($25.2 million USD) in Bitcoin in the process (via Bleeping Computer).
Hydra is a major dark web marketplace where narcotics, stolen credit card information, counterfeit money, bogus papers, and other illicit items and services may be found. The market caters mostly to criminals in Russia and the adjacent countries. Drugs are pushed around the region by “treasuremen,” or sellers affiliated with the site, who hide them at geo-tagged pickup spots.
Authorities have launched an inquiry into the “unknown operators and administrators” of Hydra, whom they accuse of selling drugs and indulging in money laundering, following the suspension of the German-based site. Since August 2021, German police said they’ve been investigating the marketplace with the cooperation of the US. As of now, no arrests have been made, according to the BKA.
Although Hydra is most known for assisting in the selling of drugs, a research from risk intelligence firm Flashpoint (via Wired) suggests that cryptocurrency laundering is also on the rise. Cybercriminals might buy cryptocurrencies from other merchants in exchange for rubles, then cash out via payment applications such as YooMoney, Tinkoff, or QUIWI. Other crypto launderers would utilize a delivery strategy similar to that used for narcotics, in which a courier would bury money in a secret spot that the consumer would later discover.
According to Wired, in 2021 and early 2022, cryptocurrency investigative firm Chainanalysis discovered $200 million in stolen bitcoin floating about on the network, including $5 million tied to fraud, $4 million linked to ransomware, and $4 million from sanctioned sources. A total of $2 billion in transactions originated from “high-risk” sources.
In reaction to the suspension, the US Treasury Department’s Office of Foreign Assets Control stated that Hydra and the Russian cryptocurrency exchange Garantex had been sanctioned. Over 100 bitcoin addresses linked to the unlawful marketplace are also being investigated by the US.
“Today’s measures send a message to criminals that they can’t hide on the darknet or on forums, in Russia or anyplace else in the globe,” Treasury Secretary Janet L. Yellen said. “We will continue to destroy these networks in collaboration with friends and partners like Germany and Estonia.”
Hydra has the largest turnover rate of any unlawful market in the world, according to Germany’s BKA and Central Office for Combating Cybercrime (ZIT), with around 17 million consumer accounts and 19,000 vendors. They estimate a turnover of about €1.23 billion ($1.35 million USD) in 2020 alone. Due to a crypto-concealing tool called the Bitcoin Bank Mixer, bitcoin transactions on Hydra are particularly difficult to detect, according to German authorities.
DarkMarket, a darknet marketplace with roughly half a million customers, was shut down by German police last year. Authorities throughout the world have long attempted to shut down illicit markets, with Silk Road, Wall Street Market, and AlphaBay all being shut down in recent years.