20
Jul 17

After AlphaBay’s Demise, Customers Flocked to Dark Market Run by Dutch Police

Earlier this month, news broke that authorities had seized the Dark Web marketplace AlphaBay, an online black market that peddled everything from heroin to stolen identity and credit card data. But it wasn’t until today, when the U.S. Justice Department held a press conference to detail the AlphaBay takedown that the other shoe dropped: Police in The Netherlands for the past month have been operating Hansa Market, a competing Dark Web bazaar that enjoyed a massive influx of new customers immediately after the AlphaBay takedown.

The normal home page for the dark Web market Hansa has been replaced by this message from U.S. law enforcement authorities.

The normal home page for the dark Web market Hansa has been replaced by this message from U.S. law enforcement authorities.

U.S. Attorney General Jeff Sessions called the AlphaBay closure “the largest takedown in world history,” targeting some 40,000 vendors who marketed a quarter-million listings for illegal drugs to more than 200,000 customers.

“By far, most of this activity was in illegal drugs, pouring fuel on the fire of a national drug epidemic,” Sessions said. “As of earlier this year, 122 vendors advertised Fentanyl. 238 advertised heroin. We know of several Americans who were killed by drugs on AlphaBay.”

Andrew McCabe, acting director of the FBI, said AlphaBay was roughly 10 times the size of the Silk Road, a similar dark market that was shuttered in a global law enforcement sting in October 2013.

As impressive as those stats may be, the real coup in this law enforcement operation became evident when Rob Wainwright, director of the European law enforcement organization Europol, detailed how the closure of AlphaBay caused a virtual stampede of former AlphaBay buyers and sellers taking their business to Hansa Market, which had been quietly and completely taken over by Dutch police one month earlier — on June 20.

“What this meant…was that we could identify and disrupt the regular criminal activity that was happening on Hansa Market but also sweep up all of those new users that were displaced from AlphaBay and looking for a new trading plot form for their criminal activities,” Wainwright told the media at today’s press conference, which seemed more interested in asking Attorney General Sessions about a recent verbal thrashing from President Trump.

“In fact, they flocked to Hansa in droves,” Wainwright continued. “We recorded an eight times increase in the number of human users on Hansa immediately following the takedown of AlphaBay. Since the undercover operation to take over Hansa market by the Dutch Police, usernames and passwords of thousands of buyers and sellers of illicit commodities have been identified and are the subject of follow-up investigations by Europol and our partner agencies.”

On July 5, the same day that AlphaBay went offline, authorities in Thailand arrested Alexandre Cazes — a 25-year-old Canadian citizen living in Thailand — on suspicion of being the creator and administrator of AlphaBay. He was charged with racketeering, conspiracy to distribute narcotics, conspiracy to commit identity theft and money laundering, among other alleged crimes.

Alexandre Cazes, standing in front of one of four Lamborghini sports cars he owned. Image: Hanke.io.

Alexandre Cazes, standing in front of one of four Lamborghini sports cars he owned. Image: Hanke.io.

Law enforcement authorities in the US and abroad also seized millions of dollars worth of Bitcoin and other assets allegedly belonging to Cazes, including four Lamborghini cars and three properties.

However, law enforcement officials never got a chance to extradite Cazes to the United States to face trial. Cazes, who allegedly went by the nicknames “Alpha02” and “Admin,” reportedly committed suicide while still in custody in Thailand.

Online discussions dedicated to the demise of AlphaBay, Hansa and other Dark Web markets — such as this megathread over at Reddit — observe that law enforcement officials may have won this battle with their clever moves, but that another drug bazaar will simply step in to fill the vacuum.

But Ronnie Tokazowski, a senior analyst at New York City-based threat intelligence firm Flashpoint, said the actions by the Dutch and American authorities could make it more difficult for established vendors from AlphaBay and Hansa to build a presence using the same identities at alternative Dark Web marketplaces.

Vendors on Dark Web markets tend to re-use the same nickname across multiple marketplaces, partly so that other cybercriminals won’t try to assume and abuse their good names on other forums, but also because a reputation for quality customer service means everything on these marketplaces and is worth a pretty penny.

But Tokazowski said even if top vendors from AlphaBay/Hansa already have a solid reputation among buyers on other marketplaces, some of those vendors may choose to walk away from their former identities and start anew.

“One of the things [the Dutch Police and FBI] mentioned was they were going after other markets using some of the several thousand password credentials they had from AlphaBay and Hansa, as a way to get access to vendor accounts,” on other marketplaces, he said. “These actions are really going to have a lot of people asking who they can trust.”

A message from Dutch authorities listing the top dark market vendors by nickname.

A message from Dutch authorities listing the top dark market vendors by nickname.

“There are dozens of these Dark Web markets, people will start to scatter to them, and it will be interesting to see who steps up to become the next AlphaBay,” Tokazowski continued. “But if people were re-using usernames and passwords across dark markets, it’s going to be a bad day for them. And from a vendor perspective, [the takedowns] make it harder for sellers to transfer reputation to another market.”

For more on how the Dutch Police’s National High Tech Crimes Unit (NHTCU) quietly assumed control over the Hansa Market, check out this story.

This story may be updated throughout the day (as per usual, any updates will be noted with a timestamp). In the meantime, the Justice Department has released a redacted copy of the indictment against Cazes (PDF), as well as a forfeiture complaint (PDF).

Update, 4:00 p.m. ET: Added perspectives from Flashpoint, and link to exclusive interview with the leader of the Dutch police unit that infiltrated Hansa.

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26 comments

  1. IRS iTunes Card

    You didn’t mention that Alexandre Cazes committed suicide in his Thailand jail cell.

    • Yes, actually I did. You didn’t read to the end of the story:

      “However, law enforcement officials never got a chance to extradite Cazes to the United States to face trial. Cazes, who allegedly went by the nicknames “Alpha02” and “Admin,” reportedly committed suicide while still in custody in Thailand.”

    • Why don’t you READ the g-damn story before commenting.

  2. This certainly puts Tuesday’s New York Times article about how the admins of Hansa Market banned fentanyl sales (https://www.nytimes.com/2017/07/18/business/dealbook/hansa-market-a-dark-web-marketplace-bans-the-sale-of-fentanyl.html) in a different light…

  3. Customers will always flock to wherever they can get product. True of any market and will never change. There’s more than Hansa out there and the evolution of buying illegal items over the Internet has shown this will continue to be an on-going challenge. I’m not supporting or condoning this activity, but fact of the matter is there is a market for illegal goods and the Internet/dark Web/Tors will continue to serve as a place to purchase them. There will be more AlphaBay’s and Alexander Cazes for a long time to come…illegal drugs and other wares are billion dollar + markets. The solution to this problem stems beyond the big W.

  4. Proves that our cyber authotities are not as ineffectual
    as we are always led to believe – I am proud of them.

    • Do you understand how little efford Cazes took to prevent getting caught ? He used the same email on a public platform. How can you feel proud about authorities when he did this and it took them so long ?

  5. He must have felt like the king of the world with four Lamborghini under him.
    But it must have also felt quite different on the water boarding table.
    Such are the uncertainties of criminal living..

  6. Hmmm…. “Suicide” in a Bangkok jail cell?

    It’s unlikely he worked for years running a giant illegal operation in Thailand without some backing and protection from people who do NOT want to be fingered by an extradited felon. It’s very likely someone was there to either “help” him with his towel or to make sure he understood that his family would be badly hurt if he let himself survive to be extradited.

    • I’d have to agree, the amount of money this individual made… I can’t imagine a ‘suicide’ took place without coercion.

  7. Stuart ONeill

    I think its unlikely he’s he is dead unless they’ve produced the body. Working in that country for that many years it’s only sensible to have an intriciate and heavily fundsd escape plan executed by executive authorities. If you were illegally making millions wouldn’t you spread a heavy amount to insure your survival?

    I knew a CIA paramiltary agent who told me and his family to never believe reports of his death unless they had seen and touched his body. This also true as reported about Mike Spann the CIA para officer killed in our initial jump into Afghanistan in Oct 2011.

    • Anyone with a minimum level of reasoning would not believe on his “sudden” death on a Bangkok jail. Likely many other people involved to assure his “instant freedom” from jail.

    • “Police said evidence points to Mr Cazes having taking his own life.”

      I agree with JohnnyS. As soon as I read the article about his suicide I felt that either it’s a law enforcement ruse (fake news) or “someone” he knew arranged for the suicide to hopefully protect “their” identity in all of this.

      Considering all of the other bad guys caught in recent memory and jailed, I’m sure he could have offered law enforcement something of interest to lighten his sentence as some others have.

      His computers and any records he had laying around are still there for the taking. Getting rid of him might not protect someone as much as they hoped for, stay tuned.

      • It’s fishy as anything, I don’t believe for a second that it was a suicide. Who knows what information he had on the operation itself, for example? Who knows how he was “interrogated” in Thailand?

    • Doubtful, if he ever showed up somewhere else, Thais would loose face, and they’d never risk that.
      They have always been quick to hand off any foreigner perceived as a criminal to whoever is accusing them. They aren’t too interested in protecting the rights of anyone who isn’t Thai. And are very anxious to not be seen as harboring foreign criminals. I’m really kinda surprised he was even held in a Thai jail and not marched straight to the airport and put on a plane in handcuffs. Must have taken Session’s DOJ too long to actually ask for him to be sent over..
      This would be especially true of the military coup installed government now holding authority.

  8. …..Police in The Netherlands for the past month have been operating Hansa Market….

    How was this take over accomplished without the Dark Web becoming aware?
    (signed) Seniorman

  9. Regarding the veracity of Cazes’ suicide, here’s a local Thai account. The jail looks nicer and cleaner than picutures of a few American jails I’ve seen.

    https://www.farang-deaths.com/case/alexandre-cazes/

    Cazes’ life as he knew it, in the lap of luxury, was over. Plenty of people have committed suicide in similar circumstances. Outside of the “Club Feds,” life in the US federal prison system is very unpleasant.

  10. Ok, call me naive, but how is it that FBI has jurisdiction here ?
    The guys was Canadian, living in Thailand and there is no evidence that any server was in the US. I certainly understand that some of the users were US based but I they were in many, many other countries, including Thailand.
    Now I understand both the “informal” influence that the USA might put on foreign governments and the well established view that the arm of the US government reaches worldwide. But in this case it would seem that he was to be tried under common law and extradited via the judicial system. What could have prevented dozens of other countries to charge him ?

    • brokering drug sales when a purchaser or seller was in the United States is clearly within the jurisdiction of the US Department of Justice. And, perhaps this is news to you, but the USDOJ works with other law enforcement agencies around the world. Were you more interested in this subject than merely reading about it here, you would have learned that Mr. Cazes was originally detained by Thai authorities on a Canadian warrant. And, note the involvement of Europol and Dutch authorities. Have you ever heard of the US Mutual Law Enforcement Assistance Act?
      The real question is why would this guy be in Thailand, unless he was interested in buggering children. Thailand is known for extradicting to the US and elsewhere. As opposed, say, to Brazil, which does not extradite to the US. Of course, Brazil is not known for being tolerant of child buggering.

      • I agree that the choice of Thailand for residency is rather unwise. That being said your theories about child abuse are completely unsubstantiated so far.

  11. The CIA are the worlds biggest Drug Cartel, he must of trod on some toes.

  12. Ok so Alpha02 is originally a carder from TCF, or Tor Carding Forum, the same place as Evo’s Verto and Kimble came from. All those guys are buddies. I dont think Alpha02 was this Caze guy but he was most likely DeSnake who was always in a state of flux on the Evo / AB forums, as he could never decide whether he was going to vend or not going to vend. I need to talk to my mate FRIM and figure some more stuff out but the only reason the FBI has got a look in here is due to Caze leaving his laptop open… oh and Dream is still alive and well and handling the new volume. I should add that CP is not tolerated on any market so you need to fix that Krebasaurus.

  13. It proves that penalizing TOR isn’t needed for fighting illegal activitity :)
    Good job. Maybe at least some drug users will think about getting out of ***…

  14. Programmer man child playing drug kingpin gets caught and can’t face the music … the dark web is a strange place, man.

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