Hydra darknet market was shut down by Germany’s Federal Police on Tuesday, April 5, 2022. Shortly after, a Russian resident was indicted by the Department of Justice on conspiracy charges related to the Hydra market.
As a result, the US Treasury Office of Foreign Assets Control (OFAC), added over 100 addresses connected with the Hydra market to the Sanctioned list. This simply means that as cryptocurrency exchange users, we are not to transact with these addresses.
WHAT WAS HYDRA?
Hydra was the largest darknet market that existed few years before now and which majorly served the Russians. The darknet market received above $1.7 billion in cryptocurrency in 2021, which was more than 75% of all darknet market revenue worldwide.
HOW THE HYDRA DARKNET MARKET OPERATED
Hydra darknet market operated in a complex way. It’s mode of operation involved scheduling drug deliveries with anonymous couriers. Then a method for contactless cash-for-drugs transactions in which purchasers buried cash in out-of-the-way wooded areas for sellers to dig up later. These procedures improved anonymous market transactions within the Hydra darknet market.
HYDRA MARKET AND MONEY LAUNDERING
Hydra darknet market and its vendors both provided money laundering services. This was carried out in a tightly-controlled and regulated infrastructure. Thus, enabling merchants and other cybercriminals to convert cryptocurrencies into Russian rubles through a few pre-approved services.
According to Chainalysis, Hydra has received $645 million in bitcoin from illegal sources since 2020. This includes funds from other darknet markets, wallets storing stolen cash, ransomware operators, and scammers. This is believed to be as a result of Hydra’s money laundering services.
THE IMPLICATION OF THE HYDRA MARKET SHUT DOWN
The implication of the hydra market shut down goes beyond sanctions. The dismantling of one of the dark web’s top criminal sites, hydra is a huge achievement for both law enforcement, cryptocurrency investigators and the entire cryptocurrency ecosystem.
CONCLUSION
With the current sanctions situation in Russia and the just included sanctioned addresses from the Hydra darknet market, cryptocurrency businesses must be more aware of sanctions now than ever before.
Hence, our Certified Cryptocurrency Compliance Specialist (3CS) Course has been designed to educate and equip compliance officers. This would enable them to properly monitor sanctioned wallets and prevent cryptocurrency exchanges, money service businesses and virtual asset service providers from becoming victims.
To be part of the next 3CS May 2022 cohort, visit our website, www.adforensics.com to register.
