German Authorities Seize Darknet Drug Marketplace DarkMarket

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In Brief
  • Europe’s largest darknet marketplace for drugs has been taken down by German authorities.

  • Europol claimed the operation as a victory in its effort to tackle the new dimension of cybercrime.

  • Bitcoin has been associated with illegal marketplaces, however, it's not as anonymous as USD cash.

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German authorities have taken down DarkMarket, Europe’s largest darknet marketplace for drugs. According to Europol, the operation was an internationally co-ordinated investigation.

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What Happened? 

The darknet operation involved law enforcement agencies from Germany, Australia, Denmark, Moldova, the United Kingdom, and the United States, and was supported by Europol.

DarkMarket allegedly allowed users to trade several illicit items, including drugs, counterfeit money, stolen credit and debit card details, and computer malware. The marketplace had just under 500,000 regular users, with more than 2,400 active vendors.

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Users and vendors allegedly bought and sold the illicit items using cryptocurrencies, racking over 320,000 transactions. Payment included over 4,650 bitcoins and 12,800 monero. At present valuations, this represents more than $170 million.

The Darknet Operation

A cybercrime unit, forming part of the German Federal Public Prosecutor’s Office, led the operation. Oldenburg’s local law enforcement department arrested an Australian citizen who is the site’s alleged mastermind.

Officers from the department also located, switched off, and seized the site’s servers which numbered over 20 in Moldova and Ukraine. The hope is that forensic analyses of the data stored on these servers will lead to the uncovering and dismantling of a larger criminal network.

Europol claimed the operation as a victory to coordinate cross-border investigations in tackling this new dimension of cybercrime. One of its focuses has been to understand how illegal vendors are using new technologies such as cryptocurrency to facilitate their crimes.

Bitcoin’s Troubled Past

Bitcoin has had a checkered history when it comes to the darknet. Inherently pseudonymous, illegal vendors on the infamous Silk Road marketplace favored the top cryptocurrency.

The now-defunct darknet site was the largest illegal marketplace in the world for several years. The US Federal Bureau of Investigations (FBI) eventually shut it down in 2013.

FBI agents initially seized 144,000 bitcoins held in wallets associated with the marketplace, worth over $3.6 million at the time.

Several further wallets linked to the site have been discovered and seized since. The most recent involved nearly $1 billion worth of bitcoin, seized by the US Department of Justice on November 3rd, 2020.

An Optimistic Future

As the cryptocurrency industry matures, some in the community see the involvement of law enforcement agencies as positive for the industry.

There is an argument that to continue attracting large institutional investment that has sparked the current bull-run, bitcoin needs to continue shaking off any association with darknet activity. 

This also comes as lawmakers worldwide look to regulate the industry, not only to reduce criminal activity but also to provide a legal framework that protects both regular users and investors.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Emmanuel entered the cryptocurrency space in 2013 as a cryptocurrency broker. He is a crypto-enthusiast, entrepreneur, and investor, who has built and led several projects and communities in the space. He is CEO and co-founder of Provence Intelligence, a boutique crypto-consultancy firm that aims to bridge the gap between the cryptocurrency and DLT space and the traditional world. Interests include DeFi, non-blockchain DLTs, and the synthetic derivatives space.

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