Market Reviews

History of AlphaBay Darknet Market

History of AlphaBay Darknet Market 1
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For years, the law enforcement agencies that combated dark web markets have been engaged in a cycle of the raid and rinse. Just as a famous online black market is destroyed, another would appear to take its place.

History of alphabay darknet market
History of alphabay darknet market

However, there are very few occasions when a dominant dark web market has been shattered by a major law enforcement operation only to be re-established a few years later.

Yes, we’re talking about Alphabay Market! The marketplace was once considered a king of the Illicit crypto-economy. How did they get to this feat? Well, for that, you need to read this article!

Alphabay: The Overview

The second-most well-known darknet market after the Silk Road was AlphaBay. It was the largest market of its time, the compelling story of the founder and admin, Alexandre Cazes, and AlphaBay’s resurrection after going down are also significant reasons for its popularity.

Until its demise in July 2017, AlphaBay was ten times larger than Silk Road, with more than 400,000 registered users and over 370,000 items for sale. Of those 240,000, around 90 per cent belonged to the Drugs & Chemicals category.

Few other markets have challenged or exceeded AlphaBay’s size; the Russian language market Hydra was the most noteworthy example.

It was often referred to as a haven for counterfeit, fraud-related, and digital items and offered an array of services for hire. The market had an extensive weapons section, with more than 5,000 items listed at its disposal.

AlphaBay’s tale is unique because it contains the human element you rarely see in any other darknet markets. The primary administrators’ identities are already blown, and they’re seen as the dark-web heroes.

Alexander Cazes was only 25 when he took his own life, leaving behind a multimillion-dollar empire that, even now, is still seen as a model for many darknet markets that are always aspiring.

Alphabay: Early Days

Alexander Cazes was a French-Canadian and talented individual from an early age. He started his first company, EBX Technologies, when he was only 17. He created websites for businesses and provided software for them, then dabbled in repairing computers and encryption while still living in his home town Quebec, Canada.

He was also proficient at the world wide web, thanks to his verifiable online history dating back to 2008 when he guided people on removing malware from a photograph in a tech forum. His parents described him as a well-mannered child who didn’t have a criminal record and didn’t do drugs or smoke.

Cazes emigrated to Thailand in 2014 after living there for a year; he founded AlphaBay in Sept 2014. The beta version of Alphabay was operational for testing purposes for three months, and it was not primarily advertised for that reason.

Alphabay officially began its operation on December 2, 2014, with Cazes acting as administrator under Alpha02. Cazes released a widely acclaimed carding guide early that year and went on to create updated versions of it from May 2014 until September of that year.

Caze’s final release of his guide’s book included a mention of a Mercedes Benz that he purchased with a “bag full of money”. He obtained that amount by exploiting the payment processing platform of Stripe.

He further revealed his life philosophy as follows:

“I don’t believe in working 40 hours per week to bring home a mere $400 per week, minus all the bills, and counting how many pennies are left in my pockets. I believe in living rather than surviving. And even with a real-life business, that’s still not enough. This is where I discovered the world of online fraud.” – alpha02, in ‘Carder Science.’

The rules of the market listings were not strict. AlphaBay used Silk Road’s escrow system and gave Finalized Early (FE) statuses to vendors who completed over 200 successful sales. Alphabay allowed sales of drugs, firearms, counterfeit items, digital items and stolen data.

However, Alphabay banned the sales of poisons, illicit pornography and services offering murder or physical harm. The first mention of Alphabay on a Darknet Market Authority Site, DeepDotWeb, came in March 2015. Community interest in the market was boosted by the exit scam of Evolution in mid-March when a darknet customer witnessed a massive influx of new users.

By the end of the week, AlphaBay surpassed 90,000 accounts, making them the next darknet market leader.

Later that month, the first actual media coverage of AlphaBay was provided when Vice wrote about a vendor selling Uber accounts on the black market for $5 apiece. The accounts had a comprehensive history of passenger fare histories, phone numbers, home addresses, and partial credit card information, which ended up being particularly concerning to users as Uber had always denied the reports of the platform databases being compromised.

ThinkingForward, a vendor on AlphaBay, allegedly hacked numerous Uber accounts and sold them online for as little as $1 in bulk purchases. It was the first incident when AlphaBay got into the radar of US law enforcement agencies.

Extortion and Ransom Attempts

In October 2015, after hackers infiltrated the systems of British phone services provider TalkTalk, AlphaBay made international news again. The hackers initially demanded a ransom of around $122,000 in Bitcoin, but after the telecommunications company refused, the Hackers announced that they would distribute the data on AlphaBay.

Courvoisier, a vendor on AlphaBay, reportedly sold the database on the market. Having around 600 successful sales, he may have acquired the data from the hackers themselves. The database mainly consisted of users’ names, phone numbers, addresses and bank account details.

Two men were apprehended for their alleged role in this matter in October 2016, pleading guilty to hacking-related charges in April 2017. Hackers stated they could not achieve their ransoming goals and handed most hacked accounts to various vendors on AlphaBay.

According to Vice, AlphaBay staff members and admins have been victims of extortion attempts themselves on many occasions. One of the widespread incidents that remain occurred in August 2016, when AlphaBay staff members paid extortionists 35 bitcoins ($45K during that time) to keep details of alpha02 (Cazes) and two market moderators secret.

Though there is no evidence that the extortionist obtained Cazes’ doxing information, seeing his arrest due to AlphaBay OpSec failure can be considered as one of the reasons that they possessed his details.

Cazes used his Hotmail email address as the default “From” address for welcoming and sending account recovery emails to users when AlphaBay was just launched in Dec. 2014. This default email address was linked to his LinkedIn profile under his name and the computer repairing business he started in his hometown Quebec, Canada. This helped law enforcement agencies to trace and arrest him.

The Roosh V Forum

Daryush Valizadeh, the alt-right blogger and pickup artist, founded the Roosh V Forum in 2008. The forum was notable for being a gathering place for men to discuss courting and dating women.

Cazes made his first appearance on the forum in October 2014, though he wasn’t active that much. Some of his recent posts date back to June 2016, after the initial successes of his platform AlphaBay. Cazes was on the forum with the name of “Rawmeo”. Interestingly, the last login on the forum by Cazes came on the day of his arrest.

He remained discreet about his real profession but constantly flexed about the money he was making, the cars he had, and the properties he bought. Cazes used to describe himself as a “business owner”.

He mainly used the forum to convey his views about women that could be interpreted in various ways morally. But the thoughts that drove all the attention were the glimpses he provided into his personal life:

  • He mentioned that he was a Bitcoin trader and owned a Bitfinex account.
  • He considered himself a privacy advocate.
  • He regarded Eastern culture to be much richer than Western culture.
  • He described his ideas and values as conservative and always praised President Donald Trump.

Cazes also liked providing genuine guidance and trying to assist other forum members. He liked bragging about his financial achievements but was never dismissing or disparaging toward colleagues he discussed with. In one particular post, he offered tips on how to live life after you’ve achieved your financial goal:

“Being young with lots of money but little life experience (like my situation) is dangerous. In a heartbeat, everything can be gone… You shouldn’t rely on material possessions to replace games, (but) you can allow yourself to have more than the average, which means having a nice car, a nice wardrobe, lovely house.

Paper assets are worth nothing. Millions in a Bitcoin wallet are worth nothing. Use that cash to leverage your lifestyle, but most importantly, do it yourself. If you want a nice car, buy one that you like, not a car popular with girls. If that’s the same car, so be it.” – Rawmeo, December 3, 2016

Fall of AlphaBay

Like every other darknet marketplace, AlphaBay ran smoothly between July 2015 and July 2017. Cazes used his marketplace to reap millions in commission fees, averaging around $600,000 to $800,000 daily. Cazes took 2-4% on each successful transaction.

Things began to deteriorate for Cazes and AlphaBay in July 2017, when law enforcement agencies issued an apprehension warrant for him and a criminal indictment followed by the end of the month. Agents had been in operation since May on the site, gathering evidence for their charge on Cazes.

Royal Thai police, with the coordination of the FBI and DEA, apprehended Cazes outside his house in Bangkok. The Thai Royal Police used a diversionary tactic to arrange a mock crash outside the home to catch him off guard.

Awaiting extradition to the US, Cazes took his own life by hanging himself with a towel on July 12. When police searched his house, he was still logged into AlphaBay. Officials have confiscated over $43 million of seized assets since May 2022.

The investigators found his encrypted laptop that had information about his assets, including:

  • $11 million of money in the cryptocurrency
  • 11 bank accounts belonging to him and his wife’s name in Thailand, Liechtenstein, Switzerland and St Vincent and the Grenadines
  • Three cars, including a Lamborghini, Porsche and a Mini Cooper
  • One BMW Bike
  • Villa and a Condo in Cyprus and Antigua
  • Three properties in Bangkok and one vacation property in Phuket, Thailand.

In February 2017, he secured Antiguan citizenship by purchasing property there.

A Comeback

The 2nd administrator of AlphaBay, DeSnake, posted a PGP-signed message in the Dread darknet forum on August 7, 2021. After being away from the community for the last five years and escaping from law enforcement agencies, AlphaBay’s secondary administrator announced a new marketplace: relaunching the old AlphaBay.

Many community members hesitated to use the platform after it was relaunched, but now Alphabay has around 800,000 active users and about 35,000 listings.
New rules, this time, prohibit customers from the Russian Federation and forbid fentanyl and related banned drugs. Another update that Alphabay has implemented is that they’ve discontinued the usage of BTC due to security issues and now only accept payment in XMR.

The new policies are intended to minimise the pressure of law enforcement on the market, though it is undoubtedly still among the high-ranking priorities for a takedown. Despite the minor changes, the spirit of the oldest darknet market is always on display. It remains the largest darknet market in terms of user engagement this year, resulting in a string of shutdowns of its rivals in recent years.

The need to decentralise the marketplace has continually been voiced by DeSnake.It would keep the market running from any remote location and keep it functional even if one of its operators gets arrested or disappears.

Timeframe of Related Events

Jul 2014 – Alexander Cazes Launches the beta version of AlphaBay

December 22, 2014 – Finally opened with complete features for the general public.

March 14, 2015 – Exit scams evolution

March 28, 2015 – AlphaBay makes its first media appearance in a Uber account story by Vice.

Apr 2015 – AlphaBay gets popular and hits more than 100,000 users.

Oct 2015 – TalkTalk, a UK-based telecommunication company, data gets breached and sold on AlphaBay.

May 2016 – Becomes the biggest name in the Darknet Market after the closure of its arch-rival Nucleus.

Aug 2016 – ransom paid to a hacker for keeping alpha02 identity hidden.

July 5, 2017 – Fall of AlphaBay, Alexandar Cazes gets arrested.

July 12, 2017 – Cazes takes his own life while waiting for extradition

August 7, 2021 – Resurrection of AlphaBay by 2nd admin DeSnake

Jun 2022 – Regain its fame as the most popular darknet market.