|Owner:||alpha02 & DeSnake|
AlphaBay was an online darknet market operating on the Tor network. Pre-launched in November 2014 and officially launched on December 22nd, 2014, it was arguably the most used darknet marketplace on Tor between 2016 and 2017. It was shut down after a law enforcement action as a part of Operation Bayonet against it in the United States, Canada, and Thailand, reported 13 July 2017. In its early days, it saw a steady growth, with 14,000 new users in the first 90 days of operation. AlphaBay Market was recognized on several darknet market directories. The darknet informer website Gwern.net placed AlphaBay Market in the top-tier of markets regarding the 6-month survival probability. It was also recognized as one of the top 10 online marketplaces by WorldTrademarkReview.com.
The marketplace permitted the sale of drugs, weapons, stolen credit card numbers, and other illegal items by relying on Bitcoin and Monero payments for anonymity. Users could protect their accounts using Two-Factor Authentication, also known as 2FA. AlphaBay Market was supposedly based in Russia, although it used mainly the English language for international users.
Transactions were processed through a centralized Escrow system to protect buyers at all times. When a transaction was started, the funds are temporarily held in the Escrow system until the buyer acknowledged receipt of the goods. The marketplace also offered a decentralized multi-signature system, where the private keys are released to the seller upon finalization.
"We investigated and found no evidence of a breach. Attempting to fraudulently access or sell accounts is illegal and we notified the authorities about this report. This is a good opportunity to remind people to use strong and unique usernames and passwords and to avoid reusing the same credentials across multiple sites and services."
In May 2015 the site announced an integrated digital contracts and escrow system. The contract system allows users to make engagements and agree to provide services in the future, according to the terms of the contract.
In October 2015, the London-based telecommunications company TalkTalk suffered a major hack. The stolen data was put for sale on Alphabay Market, which led to the arrest of a 15-year old boy. TalkTalk CEO Dido Harding issued the following statement:
"TalkTalk constantly updates its systems to make sure they are as secure as possible against the rapidly evolving threat of cyber crime, impacting an increasing number of individuals and organisations. We take any threat to the security of our customers' data extremely seriously and we are taking all the necessary steps to understand what has happened here."
The UK-based media outlet DailyMail pointed that the marketplace might be linked to the Russian mafia. According to the UK-based media outlet Daily Mirror, "It is administered in Russia and has a Russian computer server. Experts claim it has links to the countryâs mafia and has proved impossible to shut."
In April 2016 AlphaBay's API was compromised leading to 13,000 messages being stolen. In January 2017 the API was once again compromised, allowing over 200,000 private messages from the last 30 days and and a list of user names to be leaked. The attack was from a single hacker who was paid by AlphaBay for the disclosure. AlphaBay reported that the exploit had only been used in conjunction with this attack and not used previously.
Seizure and arrest of Alexandre Cazes
By July 2017, AlphaBay was ten times the size of its predecessor Silk Road (which was busted in October 2013), had over 369,000 listings, 400,000 users, was facilitating USD$600,000-$800,000 of transactions per day, and had reportedly built a strong reputation. However, a series of elementary operational security errors lead to its downfall:
About the time the service first began in December 2014, Cazes used his Hotmail address firstname.lastname@example.org as the 'From' address in system generated welcome and password reset emails, which he also used for his LinkedIn profile and his legitimate computer repair business in Canada.
Cazes used a pseudonym to run the site which he had previously used (e.g., in carding and tech forums) since at least 2008, and variously advertised this identity as the "designer", "administrator" and "owner" of the site.
When Cazes was arrested, he was logged into his laptop performing an administrative reboot on an AlphaBay server in direct response to a law-enforcement created artificial system failure; furthermore, encryption was wholly absent on said laptop.
Cazes' laptop reportedly contained an unencrypted personal net worth statement mapping all global assets across multiple jurisdictions, conveniently leading police to complete asset seizure. The servers were hosted at a company in Canada directly linked to his person. The servers contained multiple constantly open (unencrypted) hot cryptocurrency wallets. Cazes' flashy use of proceeds to purchase property, passports and luxury cars and frequent on-line boasting about his financial successes, including posting videos of himself driving luxury cars acquired through illegal proceeds, not only revealed his geographical location, it perforce made denying connection to the service impossible.
Assets acquired through proceeds were held in a variety of accounts directly linked to Cazes, his wife and companies they owned in Thailand (the same jurisdiction they lived), as well as directly held personal accounts in Liechstenstein, Cyprus, Switzerland and Antigua.
Cazes' statements about the goal of the site â "launched in September 2014 and its goal is to become the largest eBay-style underworld marketplace" â helped to legally establish intent.
Law enforcement took at least one month to obtain a US warrant, then over one month to obtain foreign warrants, prepare for and execute searches and seizures in Canada and Thailand:
- Early May 2017: Law Enforcement verifiably active on the site since at least this period.
- 1 June 2017: Warrant issued by United States District Court for the Eastern District of California for racketeering, narcotics, identity theft and access device fraud, transfer of false ID, trafficking in illegal device making equipment, and conspiracy to commit money laundering.
- 30 June 2017: Warrant is issued for Cazes' arrest in Thailand at US request.
- 5 July 2017 : Canadian police raid EBX Technologies in Montreal, Cazes' Canadian company and the reported location of the physical servers, as well as two residential properties in Trois-RiviÃ¨res. Cazes is arrested in Bangkok at his dwelling at Phutthamonthon Sai 3 Road in Thawi Watthana district which is searched by the Royal Thai Police, with the help of the FBI and DEA.
- 12 July 2017: Cazes' suspected suicide by hanging while in custody at Thailand's Narcotics Suppression Bureau headquarters in Laksi district, Bangkok, is reportedly discovered at 7AM. He was due to face US extradition.
- 16 July 2017: Cazes' wife is reported as having been charged with money laundering.
- 23 July 2017: Narcotics Suppression Bureau chief is interviewed and suggests that more suspects will be arrested soon.
- Silk Road
- Black Market Reloaded
- Cloud Nine
- Outlaw Market
- Cannabis Road
- The Marketplace
- Sheep Marketplace
- Tor hidden service
- List of all Darknet Markets
- Comparison of Darknetmarkets