Online Drug Market Empire Disappears, with $30 Million of Users' Money

A site admin has claimed Empire was paying a hacker $15,000 a week to leave them alone, before shutting up shop and fleeing with user funds.
August 27, 2020, 4:45pm
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Photo: Oramstock / Alamy Stock Photo

Empire Market, the world’s most popular darknet drug bazaar, has been taken offline under mysterious circumstances. Site owners have allegedly stolen an estimated $30 million (£22.5 million) in Bitcoin from 1 million users and thousands of dealers, who have been locked out for days.

Major UK vendors told VICE News that they have been unable to withdraw funds from Empire since the 22nd of August, even using secret links only they know. “I’m down thirty grand,” one said.

In the past, when police have seized drug markets similar to Empire, site closures are normally accompanied by triumphant takedown notices posted on the website’s homepage. This has not yet happened in Empire’s case, fuelling speculation of an “exit scam”, where site admins suddenly shut down a website and make off with vendors’ and users’ money.

This latest period of downtime follows a large-scale cyberattack against Empire in recent weeks. Each day, hackers have flooded the market with millions of fake page requests, barring entry to customers and vendors alike.

This massive DDOS (“distributed denial of service”) attack comes just months after analysts told VICE News that dark net markets were entering a new “golden age”, thanks to technological innovations that supposedly prevented such threats.

Empire market has been a prime target for hackers all year, but its owners have strived to keep the lucrative site online by publishing alternative, rotating URLs on trusted sites in an endless game of cat and mouse.

In May, renegade coders allied with Empire wrote a new open-source DDOS defence shield, known as EndGame. It was installed on the market, as well as on dozens of other key sites in the wider darknet drug ecosystem. Security analysts claimed the attacks had been neutralised, and subsequent uptime and market growth followed.

Now, insiders claim this was a lie, and that site bosses were quietly paying the extortionist – a user known only as “Gustav” – $15,000 (£11,300) a week to leave them alone.

Last week, Empire market admin “Se7en” claimed in a post on Dread – a darknet discussion forum – that market bosses had grown exasperated with Gustav’s demands, shut up shop and fled with all funds, but this cannot yet be verified.

“The market started having good uptime again after the EndGame links were added,” wrote Se7en. “The market was online because [bosses] agreed to make weekly payments to /u/SchwererGustav. [He] had been holding down the market brutally for a long time, and when the EndGame links were added, he took all those down, too. That was probably the closest the market came to a breaking point and a deal was made.”

“He must have been getting paid at least $10k or $15k a week,” he added.

Cybersecurity analyst dark.fail, whose page of the same name publishes a verified list of all current darknet markets (DNMs) – which change constantly in a bid to thwart extortionists – says these attacks are inevitable, thanks to the technical architecture encrypted marketplaces have to use in order to remain anonymous.

The scale and importance of DNMs in modern drug markets remains hard to measure, but Dark.fail claims that so-called “phishers” – who attack DNMs and then publish URLs to fake, cloned sites that they control – can net up to €100,000 (£89,500) every hour the official site remains offline, as users are duped into depositing funds into Bitcoin wallets that the fraudsters control. “The phishers then re-invest this into more attacks. It's a vicious cycle,” he says.

Empire’s problems follow months of open drug-dealing on the platform, which rose to prominence following the managed closure in April, 2019 of former DNM leader, Dream Market. Customers there were given notice of the closure and extracted their funds.  

Criminologist Rob Ralphs, at Manchester Metropolitan University, says this latest skirmish in the war on drugs is one more futile sideshow: “There has never been a greater choice of drugs. Technological advances have left police fighting battles they can no longer win. The value of the UK drugs market alone is estimated at £10 billion – an all-time high.”

The respected anonymous darknet analyst, known as @5auth, or Caleb, agrees, saying users will simply switch to competing platforms:

“They will migrate to White House and Darkmarket. I don't believe either of those are under the control of law enforcement. I believe both markets will be able to support the influx of users from Empire. They likely expected Empire's collapse, and wanted to be prepared for this exact scenario.”

@mrmichaelpower