Markets

Dark Web Marketplace Hansa Bans Fentanyl Sales In Wake Of AlphaBay Takedown

What would happen if Amazon went offline today? Not a service blip, like the June outage that redirected users to 503 error pages featuring cute puppies one morning, but a total takedown of the website, never to be restored?

After the initial panic, denial and anger — all important stages of the grieving process — customers would likely begin to turn elsewhere for the services they had previously expected from Amazon. Sites like eBay, Etsy, Alibaba and lesser-known online marketplaces would see an influx of Amazon “refugees,” and consumers would likely crown a new eCommerce King before long.

Now imagine a marketplace that, instead of selling of blenders, cosmetics, groceries, games and Echo devices, sold drugs and firearms. The illegal kind. As for its customers, they could only access the marketplace by using specialized Tor software designed to protect their anonymity while doing business on the network of sites.

This network is known as the dark web, and the marketplace was called AlphaBay.

Until law enforcement shut it down last week, AlphaBay was the dark web’s largest and most lucrative contraband marketplace. Selling not only substances and guns, but also stolen credit card credentials and other illegal goods, the company made an estimated $600,000 to $800,000 per day.

On July 5, Canadian police seized AlphaBay’s servers in Quebec, and an alleged administrator, Alexandre Cazes, was seized by Thai police. The 26-year-old Canadian programmer was slated for extradition to the U.S. but hanged himself in his Bangkok jail cell before he could be deported.

Cazes had four Lamborghinis and three houses, worth about $12 million, that he claimed to have earned through early investments in Bitcoin. Police impounded all of the above after his arrest. Cazes is survived by his wife, a Thai woman whom he married during his eight years living in the country.

The results of the AlphaBay takedown were more or less what you’d expect. After the initial stages of denial, during which users speculated that administrators had run off with their cryptocurrency or simply needed to conduct maintenance, customers eventually realized the site wasn’t coming back and flocked to AlphaBay’s competitors.

The foremost of these was Hansa Market, which hosts more than 24,000 black market drug listings. Hansa welcomed as many AlphaBay “refugees” as it could, but eventually had to put a freeze on new registrations as its servers struggled to keep up with the influx.

Newcomers, however, weren’t the only thing Hansa put on ice this month. The site has also decided to ban the sale of fentanyl, a deadly synthetic opioid that has fueled a nationwide epidemic of addiction and overdose.

In the past two years, fentanyl has overtaken heroin and prescription pills as the leading cause of overdose deaths in the U.S. It is more potent than heroin and other traditional opioids — even very small quantities can kill.

Before AlphaBay got shuttered, it had come under scrutiny for the preponderance of dealers selling fentanyl and other synthetic opioids through its marketplace. Several prominent fentanyl dealers were arrested in the months leading up to the AlphaBay takedown. Between them, they had trafficked enough fentanyl to get millions of people high.

According to one Hansa listing that survived the initial purge of fentanyl listings, a single gram of “China White Synthetic Heroin Fentanyl” retailed for $122.35.

But just in case you thought all drug dealers were bad guys, many have applauded Hansa’s decision to ban the deadly drug, despite the ban’s implications for the free market.

“Fentanyl ruins lives,” one user wrote on Hansa’s messaging forums. “Literally ruins lives. I think people can be successful without ruining someone’s life. Call me soft, but I don’t think there’s any room for that here.”

Another dealer wrote a popular Reddit post urging other dark web marketplaces to follow Hansa’s lead.

“For the average drug user not interested in ‘fent,’ a specialized market not allowing these things will be safer and less targeted,” wrote Redditor Chemical_Love_Story.

“I hate the point that I’m arguing right now because… I think it should be up to the individual what they can and can’t put into their bodies,” Chemical_Love_Story wrote in response to dissenting commenters. “No other drug has ever made me question my stance on decriminalizing all drugs.”

So far, Hansa’s competitors have not followed its example, and analysts expect many won’t. Dealers will simply take their fentanyl sales to other outlets while continuing to sell permitted products on Hansa. Many dealers prefer to diversify their risk by selling on multiple dark web sites for exactly the reason demonstrated by the AlphaBay shutdown. Law enforcement has an eye on these sites and there’s no telling when they might crack down.

Therefore, said Isak Ladegaard, a Boston College sociologist focused on dark web markets, this move by Hansa, while noble, is unlikely to reduce traffic of the drug.

“Seasoned users expected this,” said Ladegaard. “Market ‘shocks’ aren’t that shocking anymore.”

Nicolas Christin, a Carnegie Mellon professor of computer science and public policy — and longtime darknet tracker — agreed. Christin did not expect the takedown of AlphaBay to be more than a temporary snag for dark web drug dealers, despite the current chaos it’s created in the marketplace.

Christin noted AlphaBay wasn’t the first dark web takedown and it won’t be the last. Former dark web marketplace Silk Road was taken down in 2013, as was its sequel site in 2014. The market Evolution pulled an exit scam in 2015 with administrators pulling out abruptly and taking customers’ cryptocurrency with them. If anything, each crisis only makes the market grow back stronger.

“There’s a demand,” Christin said. “It’s just a question of who’s going to fulfill the supply.”

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