Russian authorities have sentenced Stanislav Moiseyev, the founder of criminal drugs platform Hydra, to life in prison after charging him with organizing a criminal drugs enterprise.

Russia’s state-run news agency reported that Moiseyev was fined 4 million rubles (~$37,000) and sentenced alongside 15 other accomplices by a Moscow court. These accomplices were fined a total of 16 million rubles (~$150,000) and received prison sentences ranging from eight to 23 years.  

Hydra operated out of Russia and Belarus between 2015 and 2018. In 2021, Chainalysis reported that the group processed almost $3.2 billion worth of crypto through various “high-risk” crypto exchanges. Crystal Blockchain also found that $780 million was transacted between Binance and Hydra.

Law enforcement reportedly seized a ton of drugs from the Hydra organization. Moiseyev and his accomplices will reportedly be imprisoned in special and strict regime penal colonies (overcrowded prisons that have been described as the harshest in Russia). 

Hydra, which was seized and shut down by the US in 2022, was one of Garantex’s largest counterparties and sent $60 million to the exchange between 2019 and 2021. Garantex founder Sergey Mendeleev launched a Tether desk last year. 

Hydra, alongside Binance and the Russian Ponzi scheme “The Finiko,” were the top three counterparties of Bitzlato, a crypto exchange that processed over $700 million worth of illicit funds. Bitzlato’s founder pleaded guilty to operating an illicit money-transmitting business a year ago.

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Dutch police have revealed that they conducted a long-term investigation into the “largest and longest running international darkweb market of all time worldwide” that resulted in the arrests of two of the operation’s admins and the seizure of €8 million ($8.7 million) in crypto.

The marketplace, which was made up of two entities, Bohemia and Cannabia, offered users the ability to buy malware and DDoS attacks, and a drugs market that sold predominantly cannabis. According to Dutch authorities, “Never before has a darkweb market of this size been discovered by the police.”

Police say the marketplace had an advertising outreach of 82,000 ads per day, facilitated 67,000 transactions per month, and made €12 million ($13.1 million) in September 2023 alone.  

The investigation began in 2022 and the marketplace collapsed in late 2023 after it performed an ‘exit scam.’ According to Bleeping Computer, various service disruptions and a feud with a “rogue developer” contributed to its collapse.

Read more: Darkweb drugs site Incognito Market threatens to out users who paid in crypto

One of the admins, a 20-year-old from the UK, was arrested at Schiphol airport on June 27, and his electronic devices along with bitcoin access keys were seized.

The other, a 23-year-old Irish man, was arrested by Irish authorities last August. Collectively, the pair made €5 million ($5.46 million) running the site. 

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Irish police have seized cryptocurrency worth €6.5 million ($7.1 million) from a trio in Dublin who have been arrested on suspicion of aiding an illegal dark web and money laundering operation. 

The Garda National Cyber Crime Bureau announced today that it seized crypto, including bitcoin and Monero, alongside a €120,000 ($131,000) luxury watch and two vehicles worth €220,000 ($240,000).

Police swooped on an address in Dublin on Monday, arresting two men, aged 23 and 49, and one woman, aged 32. 

The men are accused of aiding a criminal organisation to commit a serious offence while the woman is accused of offenses under the Money Laundering and Terrorist Financing Act 2021.

Detective Superintendent Michael Mullen said the arrests “are the result of a highly complex investigation into criminal darknet marketplace activities by specialist investigators.” 

Read more: UK hacker jailed over $900K Coinbase login scam

According to the BBC, the older of the two men and the woman have been released from custody as documents are being prepared for Ireland’s criminal prosecution agency. The younger man, however, remains in custody to be interviewed. 

The seizure will add to the stash of crypto obtained by Irish authorities by confiscating criminal proceeds. The UK similarly controls 61,245 bitcoins worth $3.5 billion seized from illegal operations. 

The crypto may likely be lawfully disbursed, auctioned, liquidated, or transferred depending on the case’s outcome. 

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Incognito Market, a darknet platform connecting sellers of illicit substances to potential customers, was suspected of pulling an exit scam earlier this month.

Not satisfied with stealing users’ crypto deposits, however, the admin upped the ante by extorting their former user base via sensitive order information, which they claim to have harvested “over the years.”

Darknet markets are used to buy drugs anonymously online and are often believed to offer a safer experience and more reliable product than in-person interactions. However, exit scams are relatively commonplace.

Worries about Incognito Market began to circulate last week when users were unable to withdraw bitcoin and monero (a privacy-focused cryptocurrency) from the platform. Initial efforts to explain away the issue as technical issues were later dropped.

The simple exit scam took a more sinister turn when Incognito Market’s homepage was replaced with a message announcing a ‘nasty surprise,’ leaving users in no doubt: “YES, THIS IS AN EXTORTION ! ! !” 

Read more: Buying darkweb drugs with crypto still a risk — even if you leave a review

The message states that sensitive information will be published at the end of May, including “private messages, transaction info, and order details.” It contains a thinly veiled threat that “if anything were to leak to law enforcement, I guess nobody never slipped up.”

Over half a million order details and 862,000 crypto transaction IDs are supposedly at stake.

Depending on their ‘level,’ vendors must pay between $100 and $20,000 to protect their data, with prices doubling on April 1. Buyers will supposedly be able to remove their records “in a few weeks.”

Hinting that the auto-encrypt feature on their site was not to be trusted, the site may have accumulated the sensitive info via a man-in-the-middle attack. Additionally, given Incognito Market states that ‘expired’ information was never deleted, trusting that a payment will lead to records being scrubbed seems somewhat naive.

‘Double whammy’

Cybercrime expert Brian Krebs compares Incognito Market’s scheme to that of ransomware groups that regularly hack into corporations. 

Read more: Bitcoin ransomware gang claims to have hacked major UK water provider 

After obtaining sensitive customer data, the hackers demand payment, usually in bitcoin, first for a digital key needed to unlock infected systems and then again to secure a promise that any stolen data will not be published or sold, and will be destroyed.

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Cheerish Noel Taylor and Robert James Fischer, who went by the alias Sky_HIGH online, have pleaded guilty to trafficking fentanyl. According to the original indictment forfeiture notice, an undisclosed amount of crypto was among the property seized when they were arrested.

Fischer and Taylor sold a variety of different illegal drugs through a number of different darknet markets under a variety of names, including SafeServe and Sky_HIGH. Fischer would also use the alias ‘Zachary Brown’ when making shipments, apparently due to an existing arrest warrant for probation violations.

The two claimed on some of their vendor pages that they “test everything before we send it out” and added that their heroin had “NO fentanyl.” The two also sold pills designed to look like Oxycodone pills that they knew contained fentanyl and fentanyl analogs, though they did warn in the small print, “These are NOT from a pharmacy they are PRESSED from Mexico. Seasoned users only because these are strong AF, not for those who are freshly using.”

Read more: Crypto payments to China chemical suppliers fuel US fentanyl epidemic

The marketing on their vendor pages was a point of discussion, with Taylor at one point excitedly discussing a pun.

“I wrote out our lil vendor profile today… I think it’s got potential,” he wrote. “You’ll appreciate the line… High there… yep, you just clicked your new favorite vendor! Haha.”

In order to disguise the shipments within the postal system, the couple would fill the boxes containing the drugs with a variety of dollar store crap, sometimes even going so far as to hide the drugs inside packaging for toys. 

The couple face mandatory minimums of 10 years in prison for their crimes. Taylor’s sentencing is on December 8 and Fischer’s is set for January 5 next year.

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