July 13, 2017
Invariably engaged in what seems like an unfair fight against criminals unbound by law and morality, fraud prevention professionals can be excused for taking pleasure in the misfortunes of brazen fraudsters. Rarely are they publicly held to account.
Last week, Alphabay, the largest online marketplace on the DarkNet trading in stolen information, went offline and nearly $4 million worth of Bitcoin was drained from its users’ accounts. Two main theories have emerged to explain Alphabay’s demise and neither is good news for the site’s owners or the fraudsters and criminals that used it to trade.
Many of Alphabay’s criminal users suspect the site’s administrators of running an “exit scam”—a DarkNet staple that entails running an online marketplace for fraudsters, establishing a level of trust and then simply shutting the site down and taking the virtual currency stored in wallets set up to enable trade. From a legal perspective, stealing from criminals is a low-risk activity. Several published reports, however, have referred to an Alphabay Reddit thread rife with threats from hackers to expose the identities and actions of the site’s admins and owners—a clear danger in its own right.
The other theory, one that makes sense to former hacker and security consultant Brett Johnson, is that Alphabay’s disappearance is connected to a joint raid conducted by the Royal Canadian Mounted Police and the FBI in Montreal. Johnson, creator of ShadowCrew—the first and perhaps most notorious DarkNet marketplace and message board ever—has kept a close eye on Alphabay throughout its existence and offers detailed thoughts on the situation in his blog.
Whatever theory proves true, fraudsters are out millions and the more honorable people that struggle with this type of crime every day can watch what happens when the target is on the criminals rather than legitimate businesses.