German police shut down $1.3 billion illegal darknet firm
In a joint investigation with US authorities, German police have shut down the world's largest illegal darknet market and seized $25 million worth of bitcoin
By Shashank Bhardwaj
On April 5, German police announced that they had taken down the illegal Russian darknet marketplace Hydra in a joint investigation with the FBI, DEA, IRS Criminal Investigations, and Homeland Security Investigations in the United States.
Hydra, which was founded in 2015, supplied not just illegal drugs but also stolen credit card information, counterfeit currencies, and forged documents. According to officials, Hydra was one of the largest Russian cybercrime websites on the internet, with 17 million registered customer accounts and 19,000 registered seller accounts.
The Federal Criminal Police Office (BKA) of Germany on April 5 announced that its Frankfurt division had seized facilities housing the Hydra Market's servers. Aside from shutting down the forum's servers, German authorities and the Central Office for Combating Cybercrime (ZIT) also seized the keys to wallets containing about $25 million in bitcoin. Following the server's suspension, authorities have also launched a probe into Hydra's unidentified operators and administrators, whom they suspect of trafficking drugs and engaging in money laundering.
According to a translation of the German announcement, “The preliminary investigation pending at the ZIT in this regard is directed against the previously unknown operators and administrators of the platform mentioned. Among other things, there is a suspicion of the commercial operation of criminal trading platforms on the internet, the commercial procurement or granting of an opportunity for the unauthorised purchase or the unauthorised sale of narcotics and commercial money laundering.”
The crackdown on Hydra marks the end of not only one of the world's largest hubs of online drug sales but also a money laundering and cash-out service. Although Hydra is best known for facilitating the sale of narcotics, research from risk intelligence firm Flashpoint identifies cryptocurrency laundering as an increasing trend. According to block chain analysis firm Elliptic, Hydra has facilitated more than $5 billion in illegal cryptocurrency transactions since its inception in 2015.
According to German authorities, they have been investigating the illegal marketplace with the help of the US since August 2021. In response to the shutdown, the US Department of the Treasury also levied fresh sanctions on the market and over a hundred of its cryptocurrency addresses.
Hydra's takedown is part of a larger global campaign to shut down dark web marketplaces that aid cybercrime and online drug trafficking.
The writer is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.