By Evan Spicer
Director of Cryptocurrency Investigations
Sanctions against Russia for its Ukraine invasion have been a shot in the arm for efforts to combat cybercrime. As Russian entities scramble to conceal funds, European and U.S. organizations have been working overtime to crack down on illegal activities on the dark web.
One major development was the seizure of Hydra, the world’s leading dark web marketplace with strong Russian ties. German and U.S. authorities led the way in the capture and shutting down of this criminal marketplace that was responsible for narcotics deals, money laundering, and a wide range of cybercrimes.
The Department of Justice (DoJ) charged those behind Hydra with money laundering and narcotics offenses, and German police seized bitcoin wallets containing a total of $25 million in stolen funds.
Nabbing a Monster in the Dark Web
The dark web provides access to these sites while concealing the identities of those who participate in unlawful activities. Hydra handled 80% of dark web cryptocurrency transactions,, which makes its shut down a major accomplishment for law enforcement in tackling global cybercrime.
It is estimated that Hydra handled $5.2 billion in crypto transactions since 2015, and profited from hefty commissions and fees. This platform was populated by drug dealers of all stripes, but it also provided resources for all types of cybercrime.
It sold mixing devices that scramble data of cryptocurrency transactions so cybercriminals could more easily disguise their tracks. It also provided resources for those seeking to hide their identities and keep their website from attracting the attention of authorities. Additionally, Hydra also gave cybercriminals a place to stash their funds.
The Hydra Challenge; Restoring Funds to Victims
Shutting down huge criminal enterprises like Hydra is terrific news for law enforcement. The more difficult task, however, is returning the stolen cryptocurrency to its rightful owners. Although Chainanalysis has tracked $200 million in funds recovered from Hydra, the cryptocurrency has been linked back to the specific fraudsters –― whether it is ransomware payments, illegal casinos – or other fraudulent sources. Going a few steps further and finding the original owners requires more specific technology and expertise, and is complicated by Hydra’s huge size.
The Hydra case is evidence of progress in investigating and nabbing crypto fraud, but it also highlights new challenges. The increase in money laundering following the adoption of the sanctions against Russia created a perfect storm that increased the urgency and opportunity to catch Hydra. The cooperation of German and U.S. authorities demonstrates how much progress can be made when government bodies work together.
However, the find emphasizes the extent of money laundering and illegal crypto transactions. The billions of dollars laundered each year show how deeply embedded cryptocurrency is in all types of cybercrime, including narcotics, illegal gambling, and a myriad of financial schemes.
The Hydra case also demonstrates the need for more resources to aid consumers in tracking their cryptocurrency transactions before they reach an advanced stage of laundering. Although authorities are ready to return the millions of dollars in cryptocurrency to their original owners, after extensive money laundering, tracing back the path of transactions to their source is a challenge.
That is why it is important for consumers who have lost their cryptocurrencies to seek assistance from MyChargeBack experts without delay. The longer the issue lingers, the more their money can be laundered. The MyChargeBack team has advanced crypto trace investigation techniques and technology to track down client funds.
MyChargeBack Will Help You Find Your Funds on the Blockchain
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