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The Rise and Fall of AlphaBay

Jul 16, 2024

The Rise and Fall of AlphaBay

Introduction

  • Date: July 5th, 2017
  • Location: Bangkok
  • Main Character: Alpha02 (a multi-millionaire and kingpin of the dark web)
  • Incident: A woman crashes her car into Alpha02's gate; she is an undercover agent part of a larger operation by the Royal Thai Police, FBI, and DEA.

Context: The Dark Web Boom

  • Early 2010s: The dark web and Bitcoin facilitate anonymous criminal transactions online.
  • Silk Road: The first major dark web marketplace, launched in February 2011, shut down after 2.5 years, resulting in the founder receiving a life sentence.
  • Post-Silk Road: Explosion of darknet markets (Silk Road 2.0, Evolution, Agora, etc.).
  • Exit Scams: Notable issue where platform operators disappear with users' money.

The Emergence of AlphaBay

  • Founded: July 2014 by "Alpha02".
  • Initial Offerings: Stolen credit card data, expanded to drugs, weapons, malware, and money laundering services.
  • Forbidden Items: Child abuse-related, hit-and-runs, and stolen bank account info from Russia.
  • Platform Functionality: User-friendly interface, Bitcoin/Monero/Ethereum payments, a tumbler to mask transactions.
  • Growth: By 2017, 300,000 items listed, over $500,000 in daily sales, 2-4% commission on transactions.

Transition in Management

  • Alpha02 rebrands to "Admin," delegates operations to "DeSnake" and others.

Investigation and Identification

  • Search for Alpha02’s identity intensifies by American investigators.
  • Breakthrough: Early mistake revealed email address "[email protected]".
  • Identification: Alexandre Cazes from Trois-Rivières, Quebec, Canada.

Surveillance and Assets

  • Location: Bangkok, Thailand.
  • Assets: Multiple properties, luxury cars, millions in cryptocurrency.
  • Daily Life: Mix of mundane activities and lavish lifestyle.

Operation Bayonet

  • July 5th, 2017: Coordinated international effort to arrest Cazes.
  • Arrest Strategy: Using a staged accident to lure Cazes out with unlocked devices.
  • Success: Cazes arrested, laptop seized with active sessions to AlphaBay servers.
  • Alpha02's Wealth: $23 million in assets confiscated.
  • Aftermath: Cazes commits suicide in custody on July 12, 2017.

Aftermath and Impact

  • AlphaBay and Hansa Market shut down by authorities.
  • Migratory Effect: Users move to other darknet platforms temporarily controlled by authorities (honeypot operation).
  • Long-term: Darknet markets continue to evolve despite authorities' efforts.
  • Current Contender: "DeSnake" re-launches AlphaBay in 2021.

Ethical Considerations

  • Discussion: The dark web's duality as a haven for whistleblowers and a criminal marketplace.