AlphaBay Offline: Dark Web Market May Have Disappeared In Bitcoin-Stealing Exit Scheme

AlphaBay Market, one of the largest exchanges for illegal goods on the dark web, has been offline since Tuesday night with no explanation from the site’s moderation team, sparking speculation from users that the site—and their money—may be gone for good.

Users have begun to point to a number of withdrawals from bitcoin wallets associated with the AlphaBay Market, leading some to believe the site has vanished as part of an exit scheme designed to swindle users for their money.

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The fact the AlphaBay Market went offline is not unusual; the site regularly goes down for the purposes of maintenance. Those periods are sometimes—but not always—accompanied with an explanation from the site’s staff.

The longer users have been left in the dark, though, the more suspicious they have become. Thus far, the site’s users have tracked transactions totalling more than 1,479 Bitcoin (about $3.8 million) that have been sent to smaller accounts without explanation, leading to speculation that the site operators are stealing funds.

Adding fuel to the fire for users afraid the marketplace may be gone forever are reports that a prominent AlphaBay seller willingly handed his account over to law enforcement in the U.S. after being arrested last month by Homeland Security agents.

The vendor—based in Portland, Ore.—was found in possession of more than 10 pounds of marijuana and 500 grams of MDMA. He had reportedly conducted 1,684 sales on AlphaBay that grossed more than $1 million. The vendor handed over credentials to a secondary account, which law enforcement may have used to access the site.

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Exit schemes are not uncommon on the dark web and when they happen, often start similarly to how the AlphaBay incident has thus far played out.

Earlier this year, a market called Outlaw closed its doors due to an alleged hack but many have suggested the owners of the site simply pulled up the stakes and took the money of users with them. Likewise, the Evolution marketplace disappeared in 2015 and site owners took with them about $12 million worth of user money.

Like other markets that vanished overnight, AlphaBay has been attempting to fill in the footsteps left behind by the Silk Road, the massive dark web marketplace that gained notoriety as the first major player in dark web trading. Like Silk Road, AlphaBay allows users to buy and sell drugs, guns and other items without concern for the rule of law.

While there is fear that AlphaBay may have come to an end—and likely took millions of dollars worth of Bitcoin with it—other users have insisted it best to remain calm and wait out the storm of conspiracy theories.

There is no hard evidence to suggest AlphaBay is gone for good at this point. Some users have pointed out the bitcoin transactions haven’t directly been tied to the AlphaBay and aren’t sufficient proof of the supposed exit scheme.

Rick Holland, Vice President of Strategy for digital risk assessment company Digital Shadows told International Business Times any talk of an exit scam is just speculation at this point. He noted stories on social media, including a Reddit post claiming law enforcement raided the homes of two AlphaBay vendors, have provided no evidence to back their claims.

Additionally, Digital Shadows detected "no evidence" to suggest a link between the Bitcoin addresses highlighted as part of the supposed exit scheme and the AlphaBay marketplace itself.

"These exit scams are often the first assumption when a marketplace goes offline, however there are alternatives including intrusions from other criminals, DDoS attacks from competitors, law enforcement interdictions, and even unannounced site maintenance," Holland said.