Darkweb Wallstreet Market Busted

Discussion in 'Bitcoin and Cryptocurrency' started by mr_meanor, May 3, 2019.

  1. Eman

    Eman Member

    WSM was an awesome market...
  2. Millard Baker

    Millard Baker Member

    It hasn't gone missing. If it existed, they know exactly where it is.

    Especially if someone cashed it out... But why would you think this is the case?
    MindlessWork likes this.
  3. Millard Baker

    Millard Baker Member

    Department of Justice
    U.S. Attorney’s Office
    Central District of California
    Friday, May 3, 2019
    3 Germans Who Allegedly Operated Dark Web Marketplace with Over 1 Million Users Face U.S. Narcotics and Money Laundering Charges
    LOS ANGELES – Following a nearly two-year international investigation involving U.S. law enforcement and authorities in Germany and the Netherlands, federal prosecutors have charged three German nationals with being the administrators of Wall Street Market (WSM), which was one of the world’s largest dark web marketplaces that allowed vendors to sell a wide variety of contraband, including an array of illegal narcotics, counterfeit goods and malicious computer hacking software.

    A criminal complaint filed Wednesday in United States District Court in Los Angeles alleges that the three defendants, who currently are in custody in Germany, were the administrators of WSM, a sophisticated online marketplace available in six languages that allowed approximately 5,400 vendors to sell illegal goods to about 1.15 million customers around the world. Like other dark web marketplaces previously shut down by authorities – Silk Road and AlphaBay, for example – WSM functioned like a conventional e-commerce website, but it was a hidden service located beyond the reach of traditional internet browsers, accessible only through the use of networks designed to conceal user identities, such as the Tor network.

    For nearly three years, WSM allegedly was operated on the dark web by the three men who now face charges in both the United States and Germany. An “exit scam” was allegedly conducted last month when the WSM administrators took all of the virtual currency held in marketplace escrow and user accounts – believed by investigators to be approximately $11 million – and then diverted the money to their own accounts. Exit scams are common among large darknet marketplaces, which typically hold money in escrow while a vendor delivers illicit goods.

    The three defendants charged in the United States were arrested in Germany on April 23 and 24. They are a 23-year-old resident of Kleve, Germany; a 31-year-old resident of Wurzburg, Germany; and a 29-year-old resident of Stuttgart, Germany. The complaint charges the men with two felony counts – conspiracy to launder monetary instruments, and distribution and conspiracy to distribute controlled substances. These three defendants also face charges in Germany.

    A fourth defendant linked to Wall Street Market was charged yesterday in a criminal complaint filed in United States District Court in Sacramento, California. Marcos Paulo De Oliveira-Annibale, 29, of Sao Paulo, Brazil, also faces federal drug distribution and money laundering charges for allegedly acting as a moderator on WSM, who, among other things, mediated disputes between vendors and their customers. Annibale, who used the online monikers “MED3LIN,” also acted as a public relations representative for WSM by, among others things, promoting WSM on websites such as Reddit, according to the complaint. The case naming Annibale was unsealed today when Brazilian authorities executed a search warrant at his residence.

    The two cases filed in the United States are the result of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the U.S. Postal Inspection Service, IRS Criminal Investigation, and U.S. Immigration and Customs’ Enforcement’s Homeland Security Investigations (HSI).

    “We continue to keep pace with sophisticated actors on the dark web by increasing our technical abilities and working even more closely with our international law enforcement partners,” said United States Attorney Nick Hanna. “While they lurk in the deepest corners of the internet, this case shows that we can hunt down these criminals wherever they hide.”

    “We are on the hunt for even the tiniest of breadcrumbs to identify criminals on the dark web,” said United States Attorney McGregor W. Scott for the Eastern District of California. “The prosecution of these defendants shows that even the smallest mistake will allow us to figure out a cybercriminal’s true identity. As with defendant Marcos Annibale, forum posts and pictures of him online from years ago allowed us to connect the dots between him and his online persona ‘Med3l1n.’ No matter where they live, we will investigate and prosecute criminals who create, maintain, and promote dark web marketplaces to sell illegal drugs and other contraband.”

    “Just as international law-enforcement partners began dismantling Wall Street Market and taking action against its members, as alleged in the complaint, the site’s administrators decided to steal their customers’ money via an exit scam,” said Assistant Attorney General Brian Benczkowski. “This operation sends a crystal-clear message: dark markets offer no safe haven. The arrest and prosecution of the criminals who allegedly ran this darknet marketplace is a great example of our partnership with law enforcement authorities in Europe, with the support of Europol, and demonstrates what we can do when we stand together.”

    “Investigators from many countries overcame the national, legal and diplomatic challenges to hold accountable sophisticated actors who operated one of the largest known encrypted marketplaces in the shadowy environment of the Darknet,” said Assistant Director Paul Delacourt of the FBI’s Los Angeles Field Office. “This case is an example of successful global collaboration among law enforcement entities who share the many challenges of prosecuting transnational criminal activity conducted by individuals who operate anonymously across borders.”

    The affidavit in support of the criminal complaint filed in Los Angeles outlines how the defendants operated a sophisticated online marketplace that offered encrypted communications between buyers and sellers, as well as an online forum to discuss vendors and the quality of their wares. The affidavit also describes an international investigation that was able to identify the three administrators of WSM, show how they previously operated another German-based darknet marketplace that shut down in 2016, and link them to computer servers in Germany and the Netherlands that were used to operate WSM and process virtual currency transactions.

    The three defendants allegedly created WSM, maintained the website, and operated the marketplace to ensure that buyers could access vendor pages and that financial transactions were properly processed. The investigation outlined in the complaint affidavit linked the three defendants to WSM in a number of ways, including their access to the WSM computer infrastructure. One defendant, for example, used virtual private networks to access WSM computers, but when a VPN connection would fail, his IP was revealed and authorities were able to identify his specific location.

    The three defendants charged in Los Angeles were arrested in Germany after the WSM administrators conducted an exit scam in the wake of WSM recently becoming regarded as the world’s pre-eminent dark web marketplace and gaining a significant influx of new vendors and users, according to the affidavit. On April 16, vendors realized they could not collect the virtual funds that had been placed in escrow by their customers, which prompted German authorities to execute a series of arrest and search warrants.

    The complaint affidavit identifies several cases that have been filed in the United States against WSM vendors. One darknet vendor who advertised on WSM is currently serving a 12-year federal prison sentence after being convicted in the Western District of Wisconsin for distributing a fentanyl analogue resulting in the overdose death of a Florida resident who ordered a nasal spray laced with the powerful opioid from the vendor.

    Two of the “top vendors” on WSM – identified by the online monikers Platinum45 and Ladyskywalker – were based in the Los Angeles area and were major drug distributors. One vender, “Ladyskywalker,” operated on several darknet marketplaces, where the individual advertised and sold opioids such as fentanyl, oxycodone and hydrocodone. The second top vendor – who used the moniker “Platinum45” and operated on at least two darknet marketplaces, including WSM – advertised and sold drugs such as methamphetamine, Adderall and oxycodone to customers in the United States and around the world, including in Germany and Australia. “Platinum45” also manufactured Adderall tablets and advertised the sale of up to 1 kilogram quantities of methamphetamine on WSM.

    “The dark web marketplace, Wall Street Market, was one of the largest operating hosts for vendors peddling illegal wares,” said DEA San Francisco Special Agent in Charge Chris Nielsen. “Law enforcement is always adapting to changes in technology and this case sends a clear message to those breaking the law and attempting to hide behind the illusion of anonymity – we will identify and find you. The success of this case is due to the excellent cooperation between law enforcement agencies from around the globe who delivered another blow to criminal networks operating in the underground cyberspace.”

    “Anyone who thinks the dark web is a safe place to conduct illegal commerce should know they are not anonymous,” said Inspector in Charge Michael Ray of the Postal Inspection Service. “They will be found and they will be brought to justice. The Postal Inspection Service has a highly trained, skilled and committed cyber unit that works tirelessly with other law enforcement agencies to disrupt marketplaces and stop vendors from using the U.S. mail to ship illegal goods and dangerous drugs.”

    “Taking down this site is a huge win for past and future victims of crimes perpetrated due to the proliferation of illegal products and services being sold,” said Chief Don Fort of IRS Criminal Investigation. “We are committed to using our unique financial investigative abilities to tackle these kinds of threats head on to protect citizens, to promote cyber security and to inform the global community.”

    “HSI and our partners are at the forefront of combating narcotics trafficking, financial crimes and illicit activities purveyed by online black markets,” said HSI Acting Executive Associate Director Alysa D. Erichs. “While criminal operators may continue to grow the reach of their businesses through these dark web marketplaces, ultimately they do not escape the reach of law enforcement. We continue to investigate, disrupt, and dismantle hidden illegal networks that pose a threat in cyberspace.”

    A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

    The charges against the three WSM administrators were announced today in conjunction with authorities in Germany and the Netherlands.

    The case in the United States is being prosecuted by Assistant U.S. Attorneys Ryan White and Puneet Kakkar of the Central District of California, Assistant U.S. Attorney Grant Rabenn of the Eastern District of California, Justice Department Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section, and Justice Department Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section.

    The U.S. investigation was conducted with support and coordination provided by the Department of Justice’s multi-agency Special Operations Division.

    The Justice Department thanks its law enforcement colleagues at the German Federal Criminal Police (the Bundeskriminalamt), the German Public Prosecutor’s Office in Frankfurt, the Dutch National Police (Politie), the Netherlands National Prosecutor’s Office, Federal Police of Brazil (Policia Federal), Europol and Eurojust. Significant assistance was provided by the Office of International Affairs at the Justice Department and the Organized Crime and Drug Enforcement Task Force program.

    USAO - California, Central
    Thom Mrozek Spokesperson/Public Affairs Officer United States Attorney’s Office Central District of California (Los Angeles) (213) 894-6947
    Press Release Number:

    Source: 3 Germans Who Allegedly Operated Dark Web Marketplace with Over 1 Million Users Face U.S. Narcotics and Money Laundering Charges
    Eman and Mac11wildcat like this.
  4. Millard Baker

    Millard Baker Member

    03 May 2019
    Press Release


    The German Federal Criminal Police (Bundeskriminalamt) shut down the Wall Street Market, under the authority of the German Public Prosecutor’s office. They were supported by the Dutch National Police (Politie), Europol, Eurojust and various US government agencies (Drug Enforcement Administration, Federal Bureau of Investigation, Internal Revenue Service, Homeland Security Investigations, US Postal Inspection Service, and the US Department of Justice). The Silkkitie (known as the Valhalla Marketplace) and its contents was also seized by Finnish Customs (Tulli) in close cooperation with the French National Police (La Police Nationale Française).

    Europol supported coordinated law enforcement approach across Europe and the US was key to the success of these two investigations. Europol’s Executive Director, Catherine De Bolle, commented: “These two investigations show the importance of law enforcement cooperation at an international level and demonstrate that illegal activity on the dark web is not as anonymous as criminals may think.”

    The online marketplace Wall Street market was the world's second largest dark web market, enabling the trade in drugs (including cocaine, heroin, cannabis and amphetamines), stolen data, fake documents and malicious software. The illegal platform was exclusively accessible via the Tor network in the so-called Darknet and aimed at international trade in criminal goods. Most recently, more than 63 000 sales offers were placed on the online marketplace and more than 1 150 000 customer accounts and more than 5 400 sellers registered. For payment, the users of the online marketplace used the crypto currencies Bitcoin and Monero. The alleged marketplace officials are said to have received commission payments of 2 to 6 percent of the sales value for the settlement of illegal sales of the platform.

    This operation lead by the German authorities has seen the arrest of three suspects and as part of the house searches carried out, the police officers seized over €550 000 in cash, alongside cryptocurrencies Bitcoin and Monero in 6-digit amounts, several vehicles and other evidences, such as computers and data storage. In the US, during the investigation by the Attorney General in Los Angeles, two of the highest-selling suppliers of narcotics were arrested.

    The Silkkitie has been operating on the The Onion Router (Tor) network since 2013. Based on the findings of the investigation, Finnish Customs also made a significant Bitcoin seizure.

    For several years, narcotics and other illicit goods have been sold via this marketplace. Silkkitie is one of the oldest and internationally best-known Tor trade sites. After the Silkkitie (Valhalla) site was shut down by the authorities, some of the Finnish narcotics traders moved their activities to other illegal trade sites in the Tor network, such as Wall Street Market.

    One of Europol’s initiatives is to create a coordinated law enforcement approach to tackle crime on the dark web with the participation of law enforcement agencies from across EU Member States, operational third parties and other relevant partners, such as Eurojust.

    To achieve this goal, Europol has established a dedicated Dark Web Team to work together with EU partners and law enforcement across the globe to reduce the size of this underground illegal economy. It will deliver a complete, coordinated approach:

    • sharing information;
    • providing operational support and expertise in different crime areas;
    • developing tools, tactics and techniques to conduct dark web investigations;
    • identifying threats and targets.
    The team also aims to enhance joint technical and investigative actions, organise training and capacity-building initiatives, together with prevention and awareness-raising campaigns – a 360° strategy against criminality on the dark web.

    A shared commitment across the law enforcement community worldwide and a coordinated approach by law enforcement agencies has once again proved their effectiveness. The scale of the operation at Europol demonstrates the global commitment to tackling the use of the dark web as a means to commit crime.

    Source: Double blow to dark web marketplaces
    mr_meanor likes this.
  5. mr_meanor

    mr_meanor Member

    I am a regular browser on Wallstreet market and am very familiar with it. The Wallstreet market, as all darkweb markets, acts as an escrow service. End user deposits money to Wallstreet, vendor sends drugs, end user marks as received, Wallstreet releases funds to vendor minus 2-3%.

    About 2.5 weeks ago Wallstreet stopped releasing escrow money. The vendors stopped listing goods, many with notations stating they would presume services when escrow funds from previous sales where released, other continued selling assuming all would be well. Basically 100% of the revenue for half a month of sales on one of the world's most popular darkweb markets is unaccounted for estimated to be around 30 million dollars. People have been calling it an exit scam for the past week then all of the sudden it is busted.

    This is how I came to this conclusion.
  6. mr_meanor

    mr_meanor Member

    There are many ways to wash your btc for clean btc. Send to DEX (decentralized exchange), buy some monero or zcash, send it to another DEX and sell it back for BTC. You lose some percentages along the way I hear but you have clean BTC with no known origin and your trail lost at the first DEX.
  7. Millard Baker

    Millard Baker Member

    The feds and BKA imply they seized the BTC and XMR that were in escrow as part of ongoing exit scam. The exit scam is the reason they moved in to arrest ... and seize the coin.
  8. Millard Baker

    Millard Baker Member

    I think you misread this. They seized 600k cash. It doesn't mean the BTC XMR in escrow was missing. They got it too. They in effect stopped the exit scam and seized the coin for themselves.
    Burrr likes this.
  9. mr_meanor

    mr_meanor Member

    Yes I did not have all the facts
  10. mr_meanor

    mr_meanor Member

    But don't you just find it convenient they stopped the exit scam? Seems like if they did that then they where allowing it to operate in the first place.
  11. mr_meanor

    mr_meanor Member

    Or maybe they already had the dime on them and had to speed things up before the coin was all gone. That actually makes sense. They probably where not exit scamming at all but more trying to get the fuck outta Dodge before they where busted.
  12. Burrr

    Burrr Member AnabolicLab.com Supporter

    Yep I wonder what came first.
    Fed involvement or vendors failing to get funds.
    The feds are good at finding little crumbs of evidence and turning them into solid leads.
  13. Millard Baker

    Millard Baker Member

    That’s exactly it. They had been investigating WSM for 2 years, I think. They couldn't risk losing all the money so they had to move quickly
    mr_meanor and Burrr like this.
  14. Millard Baker

    Millard Baker Member

    Fed involvement almost 2 years

    Six digit quantity of BTC and XMR seized.

    \/ \/
    mr_meanor and Burrr like this.
  15. mr_meanor

    mr_meanor Member

    Essentially I would think vendors turn their coin to Fiat fairly quick considering the voltility of the crypto markets. So if the govt has the coin they will auction it off and it will get market dumped for sure causing atleast a small decline in upcoming prices. But then again BTC prices do some weird shit so really I'm just attempting an educated guess.
  16. Burrr

    Burrr Member AnabolicLab.com Supporter

    I wonder what agency lays claim to the coins? Germany, usa, Netherlands ...
    mr_meanor and Millard Baker like this.
  17. mr_meanor

    mr_meanor Member

    Whomever has the private keys
  18. mr_meanor

    mr_meanor Member

    Which I'm assuming would be part of the please bargaining. Confistacted crypto is worthless without the private keys.
  19. eryximachus

    eryximachus Member AnabolicLab.com Supporter

    Did anyone notice that DeepDotWeb was also seized? Wow, this is really intense.

    Are there any functioning darknet markets?
    Millard Baker likes this.
  20. mr_meanor

    mr_meanor Member