The AlphaBay dark web marketplace has been
inaccessible since 05 Jul 2017. With no substantive
explanation from the site’s owners, users have speculated that either an exit
scam (where administrators steal user cryptocurrency deposited to the
marketplace and shut down the services) or law enforcement action has taken
place. Dark web market exit scams are nothing new; the Evolution market exit scam infamously resulted in the loss of 40,000
bitcoins ($12 million). These exit scams are one of the risks when conducting
business in criminal marketplaces. Recent reports have suggested that international authorities had seized
the site, alongside the
arrest of one of its alleged operators. Both explanations remained unconfirmed
at the time of writing, but with each day that passes
the prospect of AlphaBay returning becomes increasingly unlikely.
1.
An older, established marketplace will become
the alpha male
As is often the case when a popular marketplace disappears, users will
simply migrate to other established sites. Already we have seen former AlphaBay
vendors advertising their products on other marketplaces, including Hansa and
Dream Market. Sellers have leveraged their AlphaBay vendor ratings as a measure
of their trustworthiness and reputation. Relocation is made easier as many
established vendors and regular customers would have already had multiple
accounts across the major markets.
With AlphaBay seemingly out of the picture, other sites will jostle for
supremacy by trying to attract new users through advertising and membership
deals. RS Club Market, for example, announced a referral offer on 09 Jul 2017
(a few days after AlphaBay’s disappearance) encouraging members to invite new
users in return for 30% of the site’s commission fee. The House of Lions marketplace,
similarly, has given AlphaBay sellers an opportunity to negotiate on the vendor
fee if they can verify their experience and reputation.
Figure 2: The House of Lions market has actively
targeted former AlphaBay vendors
Enlarging your customer base, however, brings its own challenges. Hansa
users have reported issues with accessing the site in the last week. As Hansa
does not require users to login to view products, a large increase in web
traffic may have disrupted the service. Now Hansa administrators have been
forced to suspend new registrations as the deal with “technical issues” caused
by what they have called an “AlphaBay refugee” influx.
2.
A new marketplace will be created to replace
AlphaBay
Some AlphaBay users
were so fond of their former haunt that they have created a new iteration of
the marketplace, dubbed GammaBay. We discovered the following call to arms by a
self-described AlphaBay veteran on Reddit:
At this stage, the
GammaBay site is still in its infancy, and the marketplace section remains unfinished.
With only 20 members registered on the site so far, it is unlikely the new site
will be able to reach the heights of its predecessor. Moreover, with rumors
that AlphaBay had been disrupted by law enforcement, many users have expressed
a reluctance to register for GammaBay, fearing that the site is actually a
honey pot intended to lure in former AlphaBay vendors. Perceived trust in a
market will play a large role in its chances of future success.
3.
Users will abandon the marketplace model and
look for alternative solutions
The fallout from AlphaBay’s disappearance could have far-reaching
implications for the future of the marketplace model. If an exit scam has taken
place, the declining trust in these markets may lead disillusioned users towards
alternative methods for conducting online transactions. If law enforcement was
responsible, then the risk of legal action will only encourage vendors to seek
more secure and anonymized methods of trade.
Although sites such as AlphaBay are very popular for goods such as drugs
and credit card information, cybercriminals selling sensitive data or malware
variants have frequently opted for direct peer-to-peer (P2P) communication and relationships
made on specialized forums. While vendors and customers might lose the
convenience of trading on a popular marketplace, they could decide that a P2P
model will give them more control and help safeguard against exit scams and
loss of funds.
Following the seizure of Silk Road in 2013, some people began working on
a new, fully-decentralized marketplace known as OpenBazaar. This open source
project is a P2Pr marketplace that allows the unrestricted sale of goods
between anonymous users. OpenBazaar is accessed through a front-end client
which can be freely downloaded from the project website. All transactions
are made using Bitcoin and are recorded on the project Blockchain as
cryptographically signed smart contracts.
The
post-AlphaBay future: short- and long-term forecasts
In the short-term, we assess that an existing
marketplace such as Dream Market or Hansa will most likely fill AlphaBay’s
shoes. The most successful marketplaces usually have a combination of: a
user-friendly interface, administrator support services, attractive fee
structures, and – crucially - a strong overall level of stability and
reputation among the online community. As perhaps the two most established
markets with the largest number of existing users, Dream Market and Hansa are
best placed to capitalize. Nonetheless, as Hansa’s recent technical difficulties
have highlighted, these sites will have to undertake improvements to ensure
their user experience is in line with what members will demand. For Hansa and
Dream Market, this will mean minimizing technical issues and refining their associated
forum pages, which both pale in comparison to what the AlphaBay forum once
offered.
In the long-term, the fall of yet another popular dark web marketplace
will only increase calls for a more secure, stable and trustworthy alternative
to the current marketplace model. Here we believe P2P models such as that
espoused by OpenBazaar have the potential to become increasingly attractive
offerings to vendors and customers alike. It remains to be seen when a suitable
platform will finally break through and disrupt the market. Digital Shadows
will continue to track the likely demise of AlphaBay and its successors.
