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German Police In Dark Web Sting of Hydra

German federal police said Tuesday they had shut down the dark web Hydra market, which trafficked in illegal narcotics and helped launder money for criminals worldwide.

Authorities seized “server infrastructure” within Germany and 543 bitcoins worth more than $25 million total as of Tuesday morning’s exchange rate, according to a news release from the BKA agency.

Later Tuesday, the U.S. Department of Justice announced an indictment of Russian resident Dmitry Olegovich Pavlov, 30, who allegedly operated the servers used to run the Russian-language Hydra. He was charged with conspiring to distribute narcotics and conspiring to commit money laundering.

Pavlov allegedly ran a company called Promservice Ltd. — also known as Hosting Company Full Drive, All Wheel Drive, and 4x4host.ru — that administered Hydra’s servers, U.S. officials said.

The U.S. Treasury Department also sanctioned Hydra on Tuesday as well as the Moscow-based cryptocurrency exchange Garantex. U.S. officials said the FBI, Drug Enforcement Administration, Internal Revenue Service, and Postal Inspection Service participated in the international Hydra investigation, which began in August 2021.

Hydra, launched in 2015, was known as the world’s largest dark web market, with sales of more than $1 billion in 2020 alone. German prosecutors said the site had about 17 million user accounts and more than 19,000 seller accounts.

“Hydra vendors offered a variety of illicit drugs for sale, including cocaine, methamphetamine, LSD, heroin, and other opioids. The vendors openly advertised their drugs on Hydra, typically including photographs and a description of the controlled substance,” the U.S. Department of Justice said. “Buyers rated the sellers and their products on a five-star rating system, and the vendors’ ratings and reviews were prominently displayed on the Hydra site.”

In handling large volumes of cryptocurrency, Hydra also ran a “mixer” service that assisted in money laundering and “made crypto investigations extremely difficult for law enforcement agencies,” the BKA said.

Researchers have said that among the mixer’s customers were people associated with the theft of $4.5 billion in cryptocurrency from the virtual exchange Bitfinex in 2016. Heather “Razzlekhan” Morgan and Ilya “Dutch” Lichtenstein were arrested in February and accused of conspiring to launder those digital coins. The DarkSide ransomware gang — known for the 2020 attack on Colonial Pipeline — also laundered some of its ill-gotten funds through Hydra, researchers have said.

The U.S. Treasury said the proceeds from the “Ryuk, Sodinokibi, and Conti ransomware variants” were among the funds handled by Hydra.

“Our actions send a message today to criminals that you cannot hide on the darknet or their forums, and you cannot hide in Russia or anywhere else in the world,” Treasury Secretary Janet Yellin said in a news release.

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