Markets Oct 18, 2020

Contrast Between Darknet Law Enforcement Seizures and Exit Scams

The contrast between exit scams and law enforcement seizures can be seen…

Dark web sites are seldom closed on amicable terms between users and operators, where vendors and customers do not suffer actual economic losses or massive disruptions to their trade.

In most cases, law enforcement operations and exit scams have led to destruction of some of the most established darknet platforms in existence. The events that follow each case of a dark web shutdown differs from one circumstance to the next.

To elucidate the expected differences between law enforcement seizures and exit scams, this article will focus on three main themes in highlight of the fact that law enforcement seizures are far more destructive than costly exit scams.

How the Markets Shut Down

While both law enforcement seizures and exit scams lead to dark web platform shutdowns, it is important to distinguish the manner in which both scenarios play out.

In a typical exit scam, a dark web platform will cease shipping user orders while continuing to accept crypto payments. Once a large accumulation of user funds is achieved, the site operators steal the money and close the site.

Point to note, exit scams present themselves in very subtle ways that users will notice they have been swindled after it’s too late to react. A dark web market’s size and reputation has a lot of influence on the manner in which an exit scam will play out – considering that the admins may intend to amass as much profit as they can harvest.

A good example is the early 2020 Apollon market exit scam where vendors in one of the biggest darknet markets at the time could not access their vendor accounts. All the while, buyers were allowed to place orders the whole time before the dark web community came to the understanding that the admins were planning to steal user funds.

In contrast, law enforcement shutdown of dark web markets happen within different circumstances. It all starts with a dark web market being thrown offline for a while before making a comeback within few weeks to operate regularly.

During this time, the target platform’s users are usually oblivious of the fact that law enforcement actors are fully in charge of their market to gather as much information before finally closing the website down for good.

Impact on Admins and Users

The main impact of typical dark web exit scams is the loss of user funds, while law enforcement takedowns can be followed by widespread panic across the dark web community.

Take the example of the recent Empire Market where admins made away with $30 million in user Bitcoin. Looking back, even a so-called amicable closure that was the Darkbay exit scam cost users lots of money in cryptocurrency.

The Evolution exit scam was quite devastating to users as it turned out that a large number its vendors could not retrieve any of their funds held in escrow and this threw them out of business as they could not trade on other sites.

Otherwise, in the context of law enforcement takedowns, the now-defunct DarkWebNews website was closed by its owners following the seizure of DeepDotWeb by the Federal Bureau of Investigations (FBI).

We can be concluded that the DarkWebNews operators feared that they would be the next platform to be targeted by the authorities. The platform’s content was very similar to that of DeepDotWeb whose administrators were accused of facilitating the access of dark web sites and marketplaces.

Few days after DeepDotWeb – which published dark web links, news articles and tutorials – was seized, DarkWebNews went silent for a while as followers seemed to be confused about the sudden absence of fresh articles.

In addition, the fact that the websites failed to discuss the fate of DeepDotWeb raised many concerns as to why the competing platform would choose to stay silent about the whole issue.

Thereafter, the site went offline and stopped operating without any explanation, seizure notice or dark web content.

Subsequent Police Arrests

Further, while dark web users are always wary of the various arrests that occur pursuit to law enforcement seizures, exit scam victims have basically nothing to worry about as far as being trailed by the authorities is concerned.

Take the example of AlphaBay market’s takedown in the year 2017. Then, AlphaBay refugees were forced to identify an alternative platform to continue their trade – vendors and buyers flocked to Hansa market in their droves.

What the users failed to understand is that Dutch law enforcement agents had already infiltrated Hansa market by the time they were pulling the string on AlphaBay. The months following the users’ migration allowed the police to collect as much information about the website as possible.

By July 2017, the authorities had managed to investigate and arrest dozens of Hansa users dealing in illicit products via the platform. The Hansa and AlphaBay operations shook the dark web community that realized the depth of law enforcement intrusion into the hidden markets.

In addition, the 2019 seizure of Wall Street market highlighted the impact of law enforcement seizures in contrast to the many exit scams that have happened in dark web history.

By the time of its death, Wall Street market had become one of the largest platforms boasting a massive user base of 5,400 vendors and 1.15 million buyers. The multilingual website offered everything from drugs, malware and stolen data.

However, in April 2019, reports started surfacing from vendors complaining about crypto losses and a lack of response from the platform’s admins. Shortly after, a notice was posted on the market’s page to claim that the site was under maintenance.

The platform’s wallet was emptied of all cryptocurrency and moved to a separate Bitcoin wallet before being transferred to other wallets. It took several days for the Wall Street market community to discover that they were about to be exit scammed.

Thereafter, a law enforcement seizure notice appeared on the dark web platform to announce that German Federal Police had taken over despite the fact that the site admins were trying to exit scam users. The German authorities effectively arrested the admins along with three main vendors.


Dear Guests and Freinds !

Remember that Tape Project is NOT responsible for other forums and markets!

Tape is NOT responsible for sites which buy advertising from us!

We are NOT responsilbe for vendor's and admin's actions from other sites!