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Tuesday, May 28, 2024 | Back issues
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Largest darknet marketplace shut down by US, German law enforcement

The Hydra marketplace allowed users to purchase a wide range of illicit goods and services, including illegal drugs, fake IDs and money laundering and hacking services.

SAN FRANCISCO (CN) – The United States and Germany took down the world’s largest and longest-running online criminal marketplace Tuesday, as the U.S. indicted a Russian man accused of keeping the illegal sales hub running for almost seven years.

Hydra Market, which started operating on the encrypted and anonymous dark web in 2015, made up 80% of darknet sales and brought in about $5.2 billion in cryptocurrency, according to the U.S. Justice Department. Hydra’s servers were seized in Germany by police there Tuesday morning in coordination with U.S. law enforcement.

“The Justice Department will be relentless in our efforts to hold accountable those who violate our laws – no matter where they are located or how they try to hide their crimes,” U.S. Attorney General Merrick Garland said in a statement. “Together with our German law enforcement partners, we have seized the infrastructure of the world’s largest darknet market, but our work is far from over.”

Hydra’s online criminal marketplace allowed users primarily from Russian-speaking nations to buy and sell illegal drugs, stolen financial data, fake IDs, money-laundering services and other illegal goods and services. Transactions were made using cryptocurrency like bitcoin, and Hydra’s operators received a cut for each transaction conducted on the platform.

“The Department of Justice will not allow darknet markets and cryptocurrency to be a safe haven for money laundering and the sale of hacking tools and services,” said Deputy Attorney General Lisa Monaco. “Our message should be clear: we will continue to go after darknet markets and those who exploit them. Together with our partners in Germany and around the world, we will continue our work to disrupt the ecosystem that allows these criminal actors to operate.”

The Justice Department also announced charges against Dmitry Olegovich Pavlov, 30, a resident of Russia who allegedly operated and oversaw the servers used to keep Hydra running. Pavlov faces charges of conspiracy to distribute narcotics and conspiracy to launder money.

Pavlov, who has not been arrested and has no lawyer listed in the federal case against him, could not be reached for comment. A Facebook message to a Dmitry Pavlov from St. Petersburg, Russia, who describes himself as a “coding machine” went unanswered.

The indictment details multiple illicit transactions that took place on the platform, including five grams of methamphetamine purchased through Hydra and shipped from Ukraine to San Francisco in September 2020.

Vendors on Hydra could set up accounts and openly advertise a wide variety of substances, including cocaine, heroin and LSD, with photographs and detailed descriptions of their wares. Buyers could write reviews and rate each seller on a five-star scale. Vendor ratings and reviews were featured prominently on the platform, according to the indictment.

U.S. law enforcement agents also used Hydra’s “Bitcoin Bank Mixer” to launder money in November 2021. The indictment further explains how Hydra vendors offered fake identifications, including passports and driver’s licenses, and hacking services. The platform enabled users to hire sophisticated hackers to target victims and gain access to their private information and take over online accounts.

“The successful seizure of Hydra, the world's largest darknet marketplace, dismantled digital infrastructures enabling a wide range of criminals — including Russian cybercriminals, the cryptocurrency tumblers and money launderers that support them and others, and drug traffickers,” FBI Director Christopher Wray said in a statement. “Today’s announcement is a testament to the strength and potency of our law enforcement partnerships here and around the world — and another example of our strategy to broadly target the entire illicit ecosystem that drives and enables crime.”

In 2013, the FBI shut down a dark web marketplace called Silk Road, founded by a young man in Texas named Ross Ulbricht. Silk Road operated in a similar way — allowing users to buy illicit goods and services and rate and review each vendors’ products. In 2015, Ulbricht was convicted and sentenced to life in prison for running the underground narcotics website.

The Seventh Circuit upheld his life sentence in 2017.

Follow @NicholasIovino
Categories / Criminal, International, Technology

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