Originally Syndicated on May 10, 2023 @ 8:24 am
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Hydra and Garantex
The move against Hydra and cryptocurrency exchange Garantex relies on recent penalties on SUEX and CHATEX, two virtual currency exchanges that, like Garantex, operated out of Moscow’s Federation Tower.
In addition to the Hydra sanctions, more than 100 virtual currency addresses linked to the operations of the organization that were utilized to carry out illegitimate transactions have also been found by OFAC.
History of Garantex
A virtual currency exchange called Garantex was established in late 2019 and was first registered in Estonia. Customers may trade virtual currencies for fiat money using Garantex. In addition to the Federation Tower in Moscow, Garantex also has approved virtual currency exchange offices in St. Petersburg, Russia, where the majority of its business is conducted.
An examination of known Garantex transactions reveals that over $100 million in transactions, including about $6 million from the Russian RaaS gang Conti and roughly $2.6 million from Hydra, are linked to illicit organizations and darknet markets. After Estonian Financial Intelligence Service supervision exposed serious AML/CFT flaws and found connections between Garantex and wallets used for illegal operations in February 2022, Garantex lost its authorization to offer virtual currency services.
Throughout this procedure, the Ministry of Finance and the Estonian authorities worked closely together. Garantex still offers consumer services in a dishonest manner after losing the Estonian license to offer virtual currency services as a result of an inquiry by the Estonian Financial Intelligence Service.
While the majority of transactions involving virtual currencies are legitimate, these currencies may also be used for illicit purposes, such as evading sanctions through darknet marketplaces, peer-to-peer exchanges, mixers, and exchangers. This includes enabling crimes like ransomware schemes. Other virtual currency exchanges, such as Garantex, Suex, and Chatex, encourage illegal activity for their own gain, while some are employed by bad individuals.
Origin of Hydra
The US Treasury notes that Hydra, the most well-known darknet market in Russia and the biggest darknet market worldwide, was introduced in 2015. The products and services provided by Hydra include ransomware, hacking services and software, stolen personal data, fake money, stolen virtual currency, and illicit substances.
It was possible to acquire and sell illicit items and services, including narcotics, stolen financial data, fictitious identities, money-laundering services, and money-mixing services, anonymously and out of sight on Hydra, an online black market that catered mostly to Russian-speaking users. the rule of law. On Hydra, transactions were made using bitcoins, and there was a fee associated with each transaction.
The Drug Enforcement Administration (DEA) spokesperson Ann Milgram stated that the “Dark Web has been a key online marketplace for the sale of lethal drugs around the world.” ” The accessibility of illicit drugs and Hydra’s services for money laundering pose a hazard to public health and safety worldwide. The DEA and our partners across the world are keeping an eye on criminals who conceal themselves on the dark web by feigning anonymity. Wherever they operate, we will keep looking into, exposing, and combating criminal networks.
Hydra: A Platform for Criminals
The darknet site Hydra provided a platform for criminals who thought they were out of reach of law enforcement to buy and sell illegal drugs and services,” said Jim Lee, director of IRS-Criminal Investigation. “Our cybercrime division once again utilized its expertise in cryptocurrency tracking to assist in taking down this website and locating its perpetrator.”
Additionally, Hydra had a large number of sellers of phony IDs. Users might filter or arrange their results by item price to find retailers who offer identity documents like US passports and driver’s licenses. Many vendors of phony identification have offered to customize papers using the purchasers’ photographs or other information.
Through Hydra, other merchants also offered hacking tools and services. Hacker service providers often allow their customers unauthorized access to their preferred web accounts. As a result, purchasers may pick their targets and employ skilled hackers to read their victims’ communications and take over their accounts.
Additionally, a variety of money-laundering and “cash out” services were provided by Hydra providers, enabling users to exchange their bitcoin (BTC) into a number of other currencies that Hydra’s numerous suppliers supported. Additionally, Hydra provided an internal mixing service to clean up provider withdrawals before processing them.
By using mixing services, users might pay a charge to distribute bitcoins to specific recipients while concealing the ownership or source of the funds. The money-laundering capabilities of Hydra were so highly desired that some users set up shell provider accounts just to send money through Hydra’s Bitcoin wallets as a money-laundering strategy.
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