A popular darknet marketplace known as the Wall Street Market has recently been taken down by authorities through a Europol-led operation that also led to three arrests, and saw police seize bitcoin and monero “in six-digit amounts.”
According to a release from the U.S. Department of Justice (DOJ), the arrests of three Wall Street Market administrators came as part of Europol’s “Dark Web Team” operations. These also saw Finnish law enforcement seize a marketplace known as Valhalla, and American authorities arrest alleged high-volume drug dealers.
The Wall Street Market, according to Europol, had over 1.15 million users and 5,400 vendors who sold drugs, malware, and other illegal materials on the platform. The investigation into Wall Street Market had reportedly been going on since 2017, but was pushed over an alleged exit scam.
— Patrick Shortis (@Patrick_Shortis) May 2, 2019
Reportedly, the market’s owners, allegedly three German residents who were caught over poor VPN connections and poor operations security, were planning to run an exit scam and take $11 million worth of crypto from its users with them.
The move is said to have started being planned after another popular darknet marketplace, Dream Market, was shut down by law enforcement. The extra attention saw Wall Street Market’s administrators fear law enforcement would go after them, thus the exit scam was planned.
When vendors found out their money was gone on April 16, German authorities started executing a “series of arrest and search warrants” to arrest Wall Street Market’s admins. These, TechCrunch reports, were associated with another darknet marketplace, German Plaza Market, which also pulled an exit scam.
The Wall Street marketplace had other issues, according to ZDNet, reportedly had other issues: staff was allegedly blackmailing users by threatening to reveal their identities, a moderator leaked high-level credentials, and more.
One of their operators was connecting to the WSM server through a VPN, and drops in the connection meant his real IP leaked and he was geolocated. Cryptomarket users often warn against using VPN's over more secure alternatives like TAILS.
— Patrick Shortis (@Patrick_Shortis) May 3, 2019
As a result of the operation, authorities seized the site’s servers, over $615,000 in cash, and bitcoin and monero “in six-digit amounts,” which could mean the equivalent of millions of dollars.
Notably, although various darknet marketplaces including AlphaBay, were taken down recently, bitcoin transactions on these platforms are said to have doubled last year. In June of 2018, the DOJ seized $20 million worth of bitcoin in an operation targeting darknet market vendors.
Recently, privacy-centric cryptocurrency monero hit a new all-time high in number of daily transactions thanks to a ‘social gambling game’, despite the darknet market shutdowns.