Justice Department Investigation shuts down largest darknet marketplace
SAN FRANCISCO, Calif. (KION-TV)-- An investigation by the Justice Department lead to the shutdown of Hydra Market, the world's largest and longest-running darknet market.
The seizure of Hydra servers and cryptocurrency wallets was made on Tuesday morning in Germany by the German Federal Criminal Police along with U.S. law enforcement.
“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 O. 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.”
In 2021, Hydra made up 80% of all darknet market-related cryptocurrency transactions.
Since 2015, the marketplace has received around $5.3 billion in cryptocurrency.
“This coordinated action sends a clear message to anyone attempting to operate or support an online criminal enterprise under the cover of the dark web. The dark web is not a place criminals can operate with impunity or hide from U.S. law enforcement, and we will continue to use our sophisticated tools and expertise to dismantle and disable darknet markets,” said Stephanie M. Hinds, U.S. Attorney for the Northern District of California. “This action also underscores the importance of international law enforcement collaboration. We thank German authorities and the Bundeskriminalamt, the German Federal Criminal Police Office, for its valued assistance in this case.”
Hydra was an online criminal marketplace that allowed mostly Russian-speaking countries to buy and sell illegal goods and services, which includes illegal drugs, stolen financial information, fraudulent identification documents and money laundering and mixing services.
Dmitry Olegovich Pavlov, 30, a resident of Russia had criminal charges of conspiracy to distribute narcotics and conspiracy to commit money laundering in connection with his operation and administration of the servers used to run Hydra.
“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,” said FBI Director Christopher Wray. “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.”
According to the indictment, vendors would create accounts on site to advertise their illegal products and buyers would purchase things like cocaine, heroin, meth, LSD and other opioids.
False IDs were also being purchased on the darknet site like driver's licenses and U.S. passports.
Hydra vendors also offered a robust array of money laundering and so-called “cash-out” services, which allowed Hydra users to convert their bitcoin (BTC) into a variety of forms of currency supported by Hydra’s wide array of vendors. In addition, Hydra offered an in-house mixing service to launder and then process vendors’ withdrawals. Mixing services allowed customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Hydra’s money laundering features were so in-demand that some users would set up shell vendor accounts for the express purpose of running money through Hydra’s bitcoin wallets as a laundering technique.
The Unites States Attorney's Office Northern District of California
