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World’s largest darknet market shut down by authorities

German prosecutors announced the successful shutdown of DarkMarket and the arrest of its alleged operator

Over the weekend, the Central Criminal Inspectorate of Oldenburg (ZKI), led by the State Central Cybercrime Office (LZC) of the Koblenz Public Prosecutor’s Office, succeeded in arresting the alleged operator of illegal darknet marketplace DarkMarket, according to a statement released by Attorney General Dr. Jürgen Brauer yesterday.

After months of intensive investigations, the police managed to close down the marketplace and switch off the servers on 11 January, with the support of the FBI, DEA and IRS of the US, as well as the British, Danish, Swiss, Australian, Ukrainian and Moldovan authorities.

DarkMarket was believed to be the world’s largest illegal darknet marketplace at the time of its closure. Nearly 500,000 users, including more than 2,400 vendors, bought and sold all kinds of drugs, malware, anonymous SIM cards, counterfeit money, stolen credit card details and much more. DarkMarket was the site of at least 320,000 transactions, accounting for the changing hands of more than 4,650 bitcoins and 12,800 monero, which at the current rate corresponds to over €140 million ($170 million).

Monero is a privacy coin, making it popular for criminal activities as it hides users’ addresses and transaction amounts, making it harder for authorities to trace transactions. For this reason, it has attracted the attention of regulators in the US and elsewhere, along with other privacy coins Zcash and Dash. The Financial Crimes Enforcement Network (FinCEN) last month proposed a rule change that would establish new reporting requirements for these coins to combat the threat of illicit finance.

The activities of DarkMarket came to the attention of German authorities in the course of a major investigation against Cyberbunker, a web-hosting service located in a former Nato bunker in south-western Germany on which the marketplace was temporarily hosted. This latest market take-down follows the shutdowns of similar darknet sites AlphaBay in 2017 and Wall Street Market in 2019.

Extensive infrastructure relating to DarkMarket, including more than 20 servers, was seized in Moldova and the Ukraine, the data from which investigators plan to use to launch new probes against the moderators, buyers and sellers who used the darknet site.

The alleged operator of DarkMarket is a 34 year old Australian citizen who was arrested near the German-Danish border. He did not volunteer any information on the case when brought before an investigating judge and was ordered to be detained on remand.

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