Why Are All the Darknet Markets Down?

While seizures and arrests occur on a regular basis, Dark Web markets are a scourge that will not be cured. Through online investigative efforts and the concerted activities of different agencies, the problem can be addressed but it will not disappear. Investigators gain access to new technology and devise new methods to research their targets. At the same time,  malicious actors on the Dark Web adapt and innovate new ways to thwart identification and prosecution.

This was no more visible than with the rise of the Silk Road marketplace in the early 2010s. Founded by Ross Ulbricht (aka Dread Pirate Roberts), the Silk Road sold a large variety of items, but was an infamous drug marketplace – with drugs accounting for 70% of the drugs sold in spring 2013. Silk Road was eventually shut down by the FBI in October 2013, following the arrest of Ross Ulbricht. Thinking beyond the sanctions implications, the removal of one of the largest illicit services on the dark web represents a huge win for both law enforcement and the cryptocurrency industry as a whole.

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Versus’ operators announced at least two more security audits in the past after suspicions of hacks or critical flaws arose. Hydra is the largest darknet market in the world, accounting for more than 75% of the total darknet market revenue in 2020, despite only serving Russian speakers. This is far from the first time authorities have shuttered major dark dark website web markets. They shut down previous record-setters like AlphaBay, Silk Road and most recently DarkMarket. We wouldn’t count on the seizure preventing other dark web shops from taking Hydra’s place, then. It could disrupt operations for a while, though, and might serve as a reminder that even the larger digital black markets can fold with little warning.

Nonetheless, threat actors adapted, with many choosing to move to the “RuTor” forum for communications and to decentralized platforms such as Telegram-based shops for drug advertisements, as well as offline sales. Russian-speaking DNM customers were historically frequent users of RuTor, where they would exchange information. However, in the wake of Hydra’s takedown many Russian vendors set up independent vendor shops and automated Telegram shops employing Telegram shop bots, although this did not imply a wholesale move away from DNMs. Written by Flashpoint’s Intelligence Team, this report is also supported by research from blockchain intelligence firm TRM Labs. As we detail below, Flashpoint observed a considerable decrease in the volume of money being handled by crypto wallets linked to dark web markets.

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He says the attacker is exploiting a browser quirk that makes an extended attack of this kind simple and cheap. When the Silk Road was in operation, you could search for it on Tor and get redirected to a signup screen requiring a username and password. Numerous U.S. agencies, including the Drug Enforcement Administration, the IRS Criminal Investigation and others were involved in the operation, dark web vs deep web they said. “The seizures carried out today were preceded by extensive investigations that have been conducted…since August 2021 and in which several US authorities were involved,” the German federal police announced. Over the years, dozens of large DNMs have been established and eventually shut down by law enforcement, including AlphaBay, Dream Market, Wall Street, and, most recently, Hydra.

For information on complying with sanctions applicable to virtual currency, see OFAC’s Sanctions Compliance Guidance for the Virtual Currency Industry here. For FinCEN’s recent alert identifying red flags on potential Russian sanctions evasion attempts, including through the use of cryptocurrency, see here. In the coming month, the Department of the Treasury will publish an updated National Strategy to Combat Illicit Finance, which will highlight planned Treasury efforts to further combat the misuse of virtual currency and exchanges. The anonymity of the dark web can seem to be impenetrable, but, as in all cybersecurity efforts, strong safeguards can be compromised by simple human error and a vigilant opponent searching for that one mistake. Commentators have suggested “multi-sig” crypto payments — requiring multiple keys to authorize a payment — and OpenBazaar, a fully-decentralized marketplace for e-commerce transactions.

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In recent weeks, many users have noticed that a large number of darknet markets have gone offline. This has left many wondering why all the darknet markets are down, and what it means for the future of these illicit online marketplaces.

Operation Onymous

One major factor that has contributed to the recent downturn in darknet markets is Operation Onymous, a coordinated international law enforcement effort targeting these sites. In November 2014, authorities in the United States, Europe, and Asia announced that they had taken down more than 400 darknet sites, including several major markets. This operation was the largest ever of its kind, and it sent shockwaves through the darknet community.

While some markets have managed to recover from the blow dealt by Operation Onymous, many others have not. This has led to a significant decrease in the number of active darknet markets, and a corresponding decrease in the number of users and vendors operating on these sites.

Security Concerns

Another factor that has contributed to the recent downturn in darknet markets is increased security concerns. In the wake of Operation Onymous, many users and vendors are wary of operating on these sites, fearing that they may be the next target of law enforcement. This has led to a decrease in the number of active users and vendors, and a corresponding decrease in the volume of transactions taking place on these sites.

Additionally, several high-profile security breaches have further eroded confidence in the security of darknet markets. In December 2014, for example, the popular market Evolution was hacked, resulting in the loss of millions of dollars worth of bitcoins. This has led many users to question the security of these sites, and to look for alternative ways to conduct illicit transactions online.

• Following Empire’s exit, its vendors and customers had to move to a new market, leading to a large influx of new users on all other open darknet markets.
• Hydra is the biggest Russian DNM, but it is not like all of the Russians cybercriminals love Hydra and use it.
• These tools enable a rapidly growing cohort of organizations around the world to safely embrace cryptocurrency-related transactions, products, and partnerships.
• Rumors are now circulating via the social media site Reddit that a third dark web marketplace, Dream Market, may also be under the control of law enforcement.
• Most of the digital content in the world is not accessible via web search engines.

The Future of Darknet Markets

Despite the recent challenges facing darknet markets, it is unlikely that they will disappear entirely. While law enforcement efforts and security concerns have certainly had an impact, there is still a significant demand for these sites among users looking to conduct illicit transactions online. As a result, it is likely that new markets will emerge to fill the void left by those that have been taken down or abandoned.

However, it is also likely that these new markets will face many of the same challenges as their predecessors. Law enforcement agencies are likely to continue their efforts to shut down these sites, and security concerns will continue to be a major issue for users and vendors. As a result, it is difficult to predict what the future holds for darknet markets, but one thing is certain: they will continue to be a controversial and hotly debated topic for the foreseeable future.