The Infinite Darknet Market Loop
2019 has been a busy year for law enforcement and the dark web. Two Darknet market sites were seized, and a third shut down. This has caused paranoia throughout the Darknet community as users are searching for new market sites, losing trust in other established markets, and looking for alternative methods to continue to purchase drugs, stolen documents, and other illegal items online. Is this the end of eBay style Darknet marketplaces? Or is this like the Matrix, where everything resets and the cat and mouse game continues in an infinite loop?
Vallahalla began in 2013 and was the oldest existing Darknet market after government actions took down more popular sites in existence at the time. The market was always smaller, averaging about 30k items for sale (in comparison, rival AlphaBay offered over 350k listings). While Finnish authorities are tight lipped about how they found the sites servers and seized it; the marketplace was shut down in February 2019. This led to the usual exodus of users, and most went to either Dream Market or Wall Street.
Dream Market became the new kingpin of the darknet markets after the seizures of AlphaBay and Hansa in 2017, offering over 120k listings. However, Dream Market was suspected of becoming a honeypot site after the arrest of one the administrators. Gal Vallerius, aka OxyMonster, was arrested in August 2017 while traveling to the US for a beard growing championship; shaking faith in the site even more. Despite this fear, users continued to use the site until a message appeared in late March 2019 announcing the shutdown of the site on April 30th, 2019. A dead link to a new marketplace was listed but never went live. This led many to believe law enforcement was shutting down the site. The site was never officially seized, though pressure from law enforcement, constant DDoS-attacks, and other factors may have caused the shutdown. Users were able to withdraw their money and many moved on to the marketplace Wall Street.
Wall Street was a small-scale marketplace, averaging about 10,000 listings, before many users flocked to the site after Dream Market announced the shutdown. This influx of users and new attention brought turmoil to the administrators of the site. With 10-15 million dollars worth of digital currency; the trio of administrators, located in Germany, decided to exit scam the site. Wall Street was placed under maintenance on April 20, 2019 and the site never returned. In the background, funds were being removed from escrow wallets and the community suspected an exit scam was in place. This was confirmed when a site moderator from Brazil confirmed the scam was in place and began blackmailing users that he would release their information unless they paid him $275 in Bitcoin. The same moderator later published his login information for the site, providing law enforcement with the keys to the castle. Due to security mistakes made by the admins, their true locations were eventually revealed, and they were arrested in late April. The site was seized on May 2nd, 2019.
Adding further fervor to the Darknet Market Community, the Clearnet website DeepDotWeb was seized and shutdown on May 6th. Launched in 2013 as a site providing DarkNet Market links and reviews, buying and selling guides, and a forum for vendors to advertise; the site was shutdown as the site owners were accused of receiving kickback payments, approximately $10 million, from vendors advertising on their site.
As the seizure of marketplaces and arrests of prolific users continues, the community of Darknet marketplace users are searching for the next place to call home. Currently Empire Market appears to be the next big market. A recent influx of users caused administrators of the site to recently admit they are adapting and have hired more staff to assist with technical issues. Other users continue to flock to decentralized peer to peer ecosystems such as Telegram chat or Open Bazaar.
The nature of the dark web and Darknet markets have changed drastically in the past five months. From international agencies to local agencies, arrests and seizures have transformed operating Darknet markets over the past two years. Fear of arrest has finally become apparent in the community. As the drug trade on the street continues today, Darknet Markets will always exist on the dark web. Keeping up with these changes is critical for law enforcement to effectively enforce this dark side of the internet.