A week on the darknet markets – the good, the bad and the ugly

Posted: March 25, 2015 in Uncategorized

Last week saw an unusual amount of activity on the dark web’s black markets. We saw generosity, compassion and friendship. We saw thievery and deception. And we saw something that went against everything the original darknet market (DNM) stood for.

This one counts as "The Ugly" - see below

This one counts as “The Ugly” – see below

The Good

Peter Nash was better known to Silk Road users as friendly forum moderator, Samesamebutdifferent (SSBD). In December 2013, the day he was due to fly to Paris to propose to his partner, Nash was arrested along with fellow alleged Silk Road staff, Andrew Jones (Inigo) and Gary Davis (Libertas). Although SSBD was the lowest-ranked and lowest paid of the three, he is the only one to have remained in jail since their arrests almost a year and a half ago.

Last week he pleaded guilty to narcotics conspiracy and money laundering conspiracy. The charges carry a theoretical maximum sentence of life in prison, although there is little chance he will receive that penalty. He is due to be sentenced on May 26.

Nash has remained stoic, upbeat and hopeful during his time in prison. His main pastime has been reading, which he has been doing voraciously.

One of Silk Road 2’s most colourful and controversial characters was GroovyBruce. A self-styled “journalist”, he created havoc on the forums of the successor Silk Road with his outrageous “articles” and shenanigans. He was a polarising character, but always got on well with SSBD.

GroovyBruce decided a fundraiser was in order. Silk Road’s supporters – or just those who don’t believe moderating a discussion forum should carry a potential life sentence – could join forces to supply Nash with some extra reading material. In typical GroovyBruce style, he went on a posting rampage on Reddit, the clearweb site where most DNM users gather. Supported by Lobali, moderator of the darknetmarkets subreddit, he reminded people of SSBD’s fate and urged members to make bitcoin donations, no matter how small.

They hoped to raise $500 or so. Instead, thanks to some exceptionally generous donations, they raised closer to $4000.

‘I just want to show him that we remember him, and we care and want to help,’ said moderator Lobali.

Nash was astounded by the unexpected generosity of the community. ‘The money is a great help but the support means more to me than any monetary amount,’ Nash wrote from prison.

The money raised will be spread among Nash’s bank account, his prison commissary account and, of course, book and magazine subscriptions.

On a side note, Nash and Ulbricht ran into each other for the first time ever last week. They “exchanged pleasantries”.

The bad

The classic Exit Scam, many say, is the perfect crime. Build up a network of trust among customers, then abscond with all their money. Those who have been ripped off have little recourse; there’s no ombudsman to complain to when your illegal goods don’t turn up or aren’t what was promised. No door to knock on and demand your money back.

Online drug dealers have done it throughout the dark markets’ history to various degrees. But on a much larger scale, sometimes the owners of a market, entrusted with all the users’ bitcoin in their accounts and held in escrow, decide to simply close the market and move the bitcoin into their personal wallets. Such was the case with Atlantis* in November 2013 and Sheep Marketplace in December the same year.

[footnote: though in retrospect, it is likely Atlantis was simply spooked. It was revealed during Ross Ulbricbht’s trial that the owners wrote to Dread Pirate Roberts around the time they closed their doors to warn him of an impending FBI investigation]

And so it was this week, with the largest black market the dark web has ever known. The owners of Evolution Marketplace – known as Verto and Kimble – brazenly told staff that they were closing the site and taking the coin. The estimated value of everything within their control ranges from $12 million to $34 million worth of bitcoin at current market rates.

But should anyone be surprised?

Gone are the days where the leading darknet market, Silk Road, refused to sell or list anything ‘the purpose of which is to harm or defraud another person’. The largest markets now list stolen credit cards and personal information, hacking services and malware alongside drugs for personal use. Evolution was founded by a character well known to the dark web. “Verto” had been administrator of Tor Carding Forum, a massive community of those who trade stolen credit or debit card account information for profit. They sold personal information, credit card dumps, ATM skimmers, cloning machines, fake IDs. And the owners pulled ponzi schemes on their own members.

Is it really so unexpected that someone who had made a career of ripping people off would stage a heist where risk was minimal and reward was great? It is likely the administrators had planned the long con, giving themselves a year or so to establish trust and amass bitcoin. Evolution had always had an easier interface and, importantly, lower commissions than any other major online black market. The profits, whilst still healthy, were unlikely to be adequate for those risking their lives and freedom.

Two (former) moderators of the Evolution forums confirmed separately that a “staff meeting” was called the morning of the closure, though their recollections differ slightly.

‘We had a staff meeting at 10:30am this morning,’ said NSWGreat, where the owners ‘announced market was being closed and they’re taking everything with them. Said market and forums would be online for 30 minutes for us to save anything we wanted to keep’.

‘It was pretty bizarre,’ confirmed EvilGrin. ‘Verto wasn’t there. Kimble said we’d wait a few minutes for him then in a few minutes he said “Verto isn’t coming to the meeting, or to any meetings again. Because I’m taking Evo offline in 30 seconds”’

Meanwhile, an ironic listing popped up on the next fastest-growing market (which bears a startling resemblance to Evolution and currently has 6000 drugs listings):

CaptainFraud’s Guide to Exit Scamming

I am selling my guide again on Exit-Scamming for vendors which ironically, I got banned for selling on the Evo forums (Even though Verto/Kimble bought my guide months before this incident and fine tune their heist thanks to me) This guide will walk you through successfully exit scamming a market whether you are an established vendor or planning to vend in the near future. Why risk LE heat/life in prison by selling crack and fullz when you can pull off a quick $20,000-$100,000 heist on a bunch of druggie n00bs.

Anyway in the guide it will tell you how to earn the trust of the sites members and how to scam thru FE and even Escrow listings. Nucleus, as you know, is ripe for scamming…even through escrow as it has a very short AF time. Also will walk you through creating shill accounts which is a must for padding your feedback and for leaving fake feedback for rival vendors. Also will explain how to SE a forum staff member and how to spot which ones are easily corrupted and will take a bribe. (I’ve bribed a bunch of Evo staff on my 10 vendor accounts I exit scammed on there).

The guide is many pages long and if you are interested contact me through PM the guide is $100.

The listing has been met with outrage on the forums. But the seller is unrepentant.

“You would all exit scam a market given the chance. Anyone who say they wouldn’t are on some fake moral highhorse and need to gtfo the darknet.” Says CaptainFraud. “People hurl threats at Evo for scamming yet it was either rob all its users blind and retire with $34 Million or get caught and go to prison the rest of there life.”

And he is probably right. As of today, Nucleus marketplace also appears to be carrying out an exit scam. Maybe the admins bought CaptainFraud’s book.

The ugly

When it was launched in January 2011, one of the stated intentions by Dread Pirate Roberts for creating the market, was to create a place where peaceful people could buy and sell drugs free from violence.

Some would say that an Exit Scam on the magnitude of Evolution is the very thing that causes exactly what the DNMs were designed to avoid. Many of the vendors on Evolution had large amounts of money tied up – money they owe to very real people in very real life who will be very unsympathetic. Vendors posted that they feared for their lives if they could not pay their own suppliers. This is almost understandable.

It is the online pitchfork brigade that gets scary.

Many of those who lost money in the Evolution exit scam (and many who did not, but were affronted by the heist) were baying for the blood of Verto and Kimble. They didn’t just want the money returned – they wanted those who had taken it to suffer.

Posters on Reddit and the DNMs were offering bounties for the dox of the Evolution admins. Some stated the explicit intention of using the disclosed identities to pay them a visit and inflict violence on them. Others straight out said they would arrange for them to die.

A bizarre drama played out on Reddit which involved internet gangstas, cryptic riddles, threatening posts, and riddles that were supposed to scare the admins out of hiding. A random IP address. A link to a LocalBitcoin account. A photograph of a person in a hoodie at Starbucks. Cryptic phrases. It is too convoluted and ridiculous to recount here, but a good overview can be found within the descriptively titled Reddit thread Admins of Evolution Marketplace, the current leading iteration of Silk-Road-esque black markets, close down site and abscond with $12,000,000 worth of Bitcoins, scamming thousands of drug dealers. Talk of suicide, hit-men, and doxxing abound on /r/DarkNetMarkets

But the Pitchfork brigade got truly ugly when they started offering money for the dox of other Evolution staff members, all of whom were presumably as in the dark as any of their customers. Some went one step further – not just the uninvolved staff, but their families as well. (See the screenshot above).

Bizarrely they chose to target the staff member who provided early warning to Evolution’s customers. NSWGreat posted a warning of the exit scam onto Reddit straight after the “staff meeting”. But it was too late.

He has since gone into hiding.

Aftermath

For now things seem to have calmed down and if there is an ongoing hunt for the admins, it is no longer playing out on Reddit. Some people are philosophical about it, claiming that they were happy to simply have had an efficient, reliable market for a year and berating anyone who stored excessive Bitcoin in their darknet wallet.

It appears the days of centralised escrow are dead. The very innovation that enabled online black markets to enter the mainstream is now the DNMs greatest downfall. Centralised escrow only works if everyone can trust the middleman. The Dread Pirate Roberts has gone and the only applicants for the new position seem to be fraudsters and crims.

Who ever would have guessed?

Comments
  1. In typical fashion you disregard SilkRoadReloaded and also ignore the fact that SilkRoadReloaded practices the same exact principles as the original.

    The losers on Tor right now love that stupid bias articles like this come out and disregard the i2p version which is still up and running right now (and has been even through this “exit scam”). Funny thing is it makes you wonder who benefits from lying and burying information about SilkRoadReloaded on i2p… Only group I can think of that would benefit is LE because they can herd you all on to Tor because they have successfully cracked it.

  2. […] Podsumowanie wydarzeń ostatniego tygodnia na czarnym rynku […]

  3. Creechman says:

    You guys should count your blessings. No one got hurt, honestly I know hiw much you “vendors” make in the margins. They don’t owe anyone unless they lost the VERY first load. No real gangsters would Float real weight first time to go in the MAIL! I have more than one friend I have laid to rest, their wives, mothers , girlfriends, children and boys would gladly throw 2k stacks at having them back. I lost 7.2 M and 7 years of my life, 2 close friends and 3 of my Fam’ to very real bullets, cops and prisons. It’s DRUG DEALING!!!! No one said otherwise? Every man vie ends the same… It’s life, Scarface and then some. The angry kid jamming his keyboard threatening death is just venting. The very real friend/girlfriend/nieghbor of these idiots holding their own 20 million dollar bounty is going to be the one to put the blowtorch to those owners. Someone gets the cash…. Always the one who has it last….. RIP $3 roxys, 13G birds of raw, $5,100 P’s😉 &200 Scripps 3 to a sheet #240 30’s 120 bars 180 Dilly’s (you could call the doc even !) numerous friends, my future …… Things I personally have had and lost. I’m 31 theirs way over 40 mil right there. I’m one little guy, drug dealing is 600 billion a quarter. The Only thing evolution did was gets it’s owners in hot water, but they were probly FEDS anyway getting coin to flush out a terrorist or some shit. STFU nerds ! Get your guns or don’t. Those who made our bones don’t care either way😔

  4. World Crypto says:

    I found this vendor Berich reliable fz3lmxbydtrljwkw.onion , I don’t trust big marketplaces that than suddenly shut down

  5. Paul says:

    Kill them all!

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