U.S., Germany Shut Down, Sanction Russia-Based Dark Net Marketplace

The United States and Germany on April 5 took steps to cut access to an illegal dark-net market site with millions of mostly Russian-speaking customers and a cryptocurrency exchange that the United States and Germany said operate out of Russia dealing mostly in illicit drugs.

German police said they shut down servers located in Germany of the illegal dark-net marketplace known as Hydra Market and seized bitcoins worth 23 million euros ($25 million). The U.S. Treasury Department said later on April 5 that it imposed sanctions on the illegal dark-net market site, which it said had millions of customers, and a cryptocurrency exchange provided by the marketplace.

The U.S. sanctions are part of a coordinated international effort with Germany's federal police “to disrupt proliferation of malicious cybercrime services, dangerous drugs, and other illegal offerings available through the Russia-based site,” the Treasury Department said in a news release.

The sanctions against Hydra Market and currency exchange Garantex were published on the Treasury Department's website on April 5.

"Our actions send a message today to criminals that you cannot hide on the dark net or their forums, and you cannot hide in Russia or anywhere else in the world," U.S. Treasury Secretary Janet Yellen said in the news release.

The dark net includes websites that can be accessed only with specific software or authorizations, ensuring anonymity for users. The Treasury Department said marketplaces that reside on the dark net almost exclusively accept virtual currency as payment.

Germany’s federal police said in a statement that its preliminary investigation is directed against suspects for "operating criminal trading platforms on the Internet on a commercial basis." No arrests have been reported.

Founded in 2015, Hydra Market served Russian-speaking markets, selling narcotics, stolen credit-card data, counterfeit currency, and fake identity documents.

The marketplace had around 17 million customer accounts and more than 19,000 vendor accounts, according to German federal police.

"The Hydra Market was probably the illegal marketplace with the highest turnover worldwide," with sales amounting to at least 1.23 billion euros in 2020 alone, the federal police statement said.

A seizure banner has been published on the marketplace's website.

The U.S. sanctions block all property and assets located in the United States belonging to individuals and entities associated with Hydra Market or Garantex. They also block all transactions by U.S. persons that involve any property belonging to Hydra Market or Garantex.