Public Key Podcast

[CHAINALYSIS PODCAST EPISODE 5] Hydra: The Shutdown of The Largest Russian Darknet Marketplace

Episode 5 of Public Key, the Chainalysis podcast, is here! We’re proud to share that this week’s episode features guests from Chainalysis partner Flashpoint Intel.

You can listen or subscribe now on Spotify, Apple, or Audible. Keep reading for a full preview of episode 5.

Public Key Episode 5 preview: Russian Darknet Criminal Ecosystem, Cash Drops and Elaborate Crypto Mixing Techniques

Last month, German authorities with assistance from US law enforcement shut down Hydra Market, which was the world’s largest darknet market by transaction volume despite serving only Russian-speaking countries. Soon after, Hydra was sanctioned by the U.S. government as well. In this episode of Public Key, our host, Ian Andrews (CMO at Chainalysis) along with his colleague, Kimberly Grauer (Director of Research) sit down with Ian Gray (Senior Director, Research & Analysis) and Vlad Cuiujuclu (Team Lead, Global Intel) of our partner company, Flashpoint Intel to cover how this historic takedown happened. They’ll also discuss how Hydra operated for so long virtually uninterrupted by Russian law enforcement, where Hydra vendors may migrate, and which other darknet markets may step in to fill the enormous void.

Quote of the episode

Yes, they can seize the infrastructure, they can seize the crypto, but they will not arrest the operators who are likely based in the Russian Federation and, getting somebody extradited from Russia right now, is very very difficult.. Vlad Cuiujuclu (Team Lead, Global Intel, Flashpoint Intel)  

Minute-by-minute episode breakdown

  • (2:00) – Behind the scenes of the biggest Darknet Marketplace shutdown in the World 
  • (4:45) – How was such a prolific Darknet Marketplace able to operate in broad daylight 
  • (7:15) – Onchain blockchain activity and major counterparties in the Hydra ecosystem 
  • (8:53) – The significance of Hydra having its servers in Germany and how that may have lead to the shutdown
  • (13:35) – Hidden Treasure and the elaborate mixing and cash out services facilitated by Hydra
  • (17:00) – How the pandemic slowed Hydra’s growth expansion into other areas of Europe
  • (21:15) – Discussions on who will fill the void afterHydra being shutdown 
  • (29:45) – How EU, Singapore and Canada are approaching the Travel Rule with respect to self-hosted wallets
  • (32:58) – The Million Dollar Interoperability question and what that means to the industry with multiple Travel Rule solution vendors

Related resources

Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.

  • Registration: Chainalysis Links Conference (May 18-19, 2022) 
  • Blog: German Authorities Seize Hydra’s Servers, Close the Largest Russian-Language Darknet Market
  • Blog: The Great Cyber Exit: Why the Number of Illicit Marketplaces Is Dwindling
  • Blog: OFAC Sanctions Hydra Following Law Enforcement Shutdown of the Darknet Market, As Well As Russian Exchange Garantex
  • DOJ Press Release: Justice Department Investigation Leads To Shutdown Of Largest Online Darknet Marketplace

Speakers on today’s episode

  • Ian Andrews * Host * (Chief Marketing Officer, Chainalysis)
  • Ian Gray (Senior Director, Research & Analysis, Flashpoint Intel)
  • Vlad Cuiujuclu (Team Lead, Global Intel, Flashpoint Intel)   
  • Kimberly Grauer (Director of Research, Chainalysis)

“We want to remind you that we are proud to have one of our partners, Flashpoint Intel, on the podcast”

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