Digital hell | Dialogue | thenews.com.pk

Hydra was a Russian-language dark web marketplace that facilitated drug trafficking and financial services like bitcoin tumbling for money laundering and crypto currency-to-Russian-ruble exchange services and the sale of documents.

On April 4, federal law enforcement agencies in the United States and Germany announced the seizure of the website’s Germany-based servers and cryptocurrency holdings. It was the longest-running dark web marketplace before it was shut down. A Russian man has been charged by the US Department of Justice (DOJ) for his role in administering the website’s servers.

One of Hydra market’s putative operators was also charged with conspiracy to distribute narcotics and money laundering.TheDOJ has also reported that the German Federal Criminal Police confiscated cryptocurrency wallets from the marketplace, holding $25 million in bitcoin.

On the dark web, cryptocurrency is popular because it allows users to conceal their identities and transaction details. In August 2017, bitcoin, monero, and ethereum were stated to be the preferred currencies for dark web transactions.

According to German investigators, a Russian-language darknet bazaar specialising in drug trading has been shut down.According to Frankfurt prosecutors, the Hydra Market platform was the world’s largest illicit marketplace.

This operation was the outcome of multinational investigations that began in August 2021.The Hydra Market has been used to sell illegal substances, counterfeit documents, intercepted data, and “digital services” since at least 2015.

Its sales in 2020 were at least €1.23 billion, making it “the unlawful market with the biggest turnover in the world.” The platform has over 19,000 registered sellers and over 17 million registered customers.

The darknet, also known as the dark web, is a collection of websites that are hidden from standard search engines and web browsers, with users accessing them via anonymous browsers.The Hydra Market, whose customers were mostly from Russian-speaking countries, represented around 80 percent of all darknet market-related bitcoin transactions last year.The Hydra Market has received nearly $5.2 billion in bitcoin for transactions on the site since 2015, raking in millions of dollars in commissions.The Hydra Market allowed vendors of a wide range of drugs, including heroin, other opiates, cocaine, methamphetamine, and lysergic acid diethylamide (LSD), to connect with buyers who could grade dealers on a five-star scale.The platform also allowed for the selling of forged identification cards, hacking tools and services and bitcoin money laundering.

In connection with this operation and administration of the servers used to host Hydra, it has obtained an indictment against Dmitry Olegovich Pavlov, a 30-year-old Russian resident, for conspiracy to distribute narcotics and conspiracy to launder money.Pavlov is accused of running a company that “allowed the market to operate as a platform used by thousands of drug dealers and other unlawful vendors to distribute large quantities of illegal drugs and other illicit goods and services to thousands of buyers and to launder billions of dollars derived from these unlawful transactions” beginning in late 2015.

After the development, US Attorney General Merrick stated:We have seized the infrastructure of the world’s largest darknet market with our German law enforcement colleagues, but our job is far from over. We will continue to cooperate with our international and interagency partners to disrupt and deconstruct darknet markets, and to hold those who conduct crimes on the dark web accountable for their actions.”

Scams and thefts hit an all-time low as a percentage of overall crypto transactions last year, despite a sharp increase in criminal behaviour by the total volume compared to 2020’s statistics. The total transaction volume increased by more than 550 percent in 2021, reaching $15.8 trillion. According to Chainalysis, illegal activity accounted for 0.15 percent of all block-chain transactions last year, a 75 percent decrease from 2020 and a nearly 96 percent decrease from 2019. In 2021, there was a surge in on-chain activity. It is just that the number of criminals hasn’t kept pace with the number of genuine use cases. According to researchers, the limited expansion of crypto-based crime can be attributed in part to law enforcement and the inherent openness of block-chain technologies.

The Federal Bureau of Investigation (FBI) in the United States has established a dedicated team to investigate cryptocurrency-relatedcrimes. TheNational Cryptocurrency Enforcement Team (NCET), which was established in October 2021, will assess whether various sorts of cryptocurrency crimes may require additional resources to investigate and prosecute.

In 2021, around $2.7 billion was stolen in bitcoin, and $7.8 billion in cryptocurrency was conned. According to Chainalysis, cryptocurrency-related crime reached a new all-time high in 2021, with $14 billion worth of block-chain transactions, owing in part to the rise of decentralised financing (Defi) platforms.The value of illegal transactions increased by over 80 percent.

“Defi is one of the most interesting aspects of the wider cryptocurrency ecosystem, giving a significant opportunity to businesses and cryptocurrency users alike.”However, the decentralisation also allows for widespread scamming and theft.

Unlike traditional forms of fiat money transmission, every transaction on the block-chain is recorded in a publicly available ledger, making it transparent and allowing users to discover how much bitcoin activity is linked to criminal conduct.Authorities have had tremendous success using the transparency of block-chains to investigate and shut down illegal businesses.Investors have lost over $12 billion last year, more than 80 percent of it due to scams and thefts.

Aspecialized team of cryptocurrency professionals is dedicated to providing research, support and training across the FBI, as well as improving its cryptocurrency technologies to keep ahead of future threats.The team will concentrate on crypto exchanges, mixers, tumblers and other forms of digital asset infrastructure providers that could enable “criminal exploitation of cryptocurrency,” according to the report.

The creation of the team follows the largest-ever financial seizure by the DOJ earlier this month, in which a New York couple was detained for allegedly laundering bitcoins worth over $4.5 billion stolen in the 2016 breach of the digital currency exchange Bitfinex.


The author is a researcher and cyber security specialist. He can be reached at cyber.expertabbasi@gmail.com


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