AlphaBay, one-stop shop for criminals, is shut down; alleged mastermind dead

The world’s largest underground market for illicit goods was shut down last week following the arrest of its alleged mastermind in Thailand.

“It was one-stop shopping for criminals,” Edward J. McAndrew, a former federal cyber-crime prosecutor for the U.S. Attorney’s Office, said Friday. “Drugs, child porn, weapons, credit card numbers, personal ID information. You name it, you could buy it there. It really was a bazaar.”

AlphaBay was allegedly used by a Philadelphia fentanyl dealer who was charged this week. The site was launched in November 2014 on the “dark web,” a freewheeling segment of the Internet that requires identity-shielding software to use. The site’s emergence filled the void created when its predecessor, Silk Road, was dismantled in 2013 by federal officials.

AlphaBay, which primarily served an anonymous marketplace for recreational drugs, grew to become twice the size of Silk Road, said Nicolas Christin, a professor of computer science and public policy at Carnegie Mellon University in Pittsburgh.  During the first quarter of 2017, AlphaBay netted $600,000 to $800,000 a day, he said.

“And that’s a conservative estimate,” said Christin, who estimated that AlphaBay’s operators earned about 6 percent of the price of every item sold.

AlphaBay’s reputed founder, Alexandre Cazes, was arrested July 5 in Bangkok. Thai authorities confiscated Cazes’ four Lamborghini sports cars and three houses, according to the Bangkok Post. Police in Canada seized several web servers in Quebec. On July 12, Cazes, a 26-year-old Canadian citizen, was found dead in his jail cell of an apparent suicide.

Christin said shutting down AlphaBay likely would have little impact on illicit trade on the internet.

“It’s not super-effective,” he said. “It will only disrupt the market on a short-term basis. Going after large vendors seems like a more valuable avenue for intervention.”

Agents with Homeland Security Investigations (HSI) in Philadelphia declined to comment on the closing of AlphaBay. This week, they arrested a reputed mail-order fentanyl dealer who took thousands of orders over the website.

Henry Koffie of Darby Borough allegedly distributed seven kilograms of the deadly narcotic, using the U.S. Postal Service to deliver the drugs to his customers. HSI called Koffie “one of the Top 10” fentanyl dealers on the dark web. Koffie’s lawyer said there was no proof that his client was the man HSI identified under the name “Narcoboss.”

McAndrew, the former cybercrime prosecutor who is now a partner at Ballard Spahr, said dark web entrepreneurs often feel invincible because their identities are cloaked with an aura of anonymity. McAndrew said other marketplaces were already springing up to replace AlphaBay.

“There is a whack-a-mole quality to this. There’s nothing you can do to totally stop it,” McAndrew said. “But operations like this send a message to people that they’re wrong if they think they’re beyond reach.”