Bitcoin Forum

German authorities seized $25 million in bitcoin (BTC) as they shut down Hydra Market, saying they had closed one of the world's largest darknet markets.

The Hydra Market's bitcoin privacy mixer complicated the investigation, police said.

The cybercrime office of the Frankfurt prosecutor's office and federal criminal police confiscated 543 BTC as they "secured" the site's servers, according to a federal police statement on Tuesday.

Federal police found 17 million customers and 19,000 seller accounts. Hydra Market probably had the highest turnover among illegal marketplaces in the world, according to the statement. In 2020, the marketplace had €1.23 billion ($1.35 billion) in revenue, the police said.

The Russian-language marketplace also had a built-in bitcoin privacy mixer, which complicated tracing the transactions, said the police statement.

Hydra Market had been operating since 2015 and was accessible via the Tor browser. The site has been taken off the internet.

The market was mainly used for narcotics, and served Russia, Ukraine, Belarus, Kazakhstan, Azerbaijan, Armenia, Kyrgyzstan, Uzbekistan, Tajikistan and Moldova, according to blockchain forensics firm Ciphertrace.

The investigation started in August 2021 and also involved U.S. authorities, the police said.

Link:https://www.coinshots.com/news/german-authorities-shut-down-russian-darknet-market-seize-25m-in-bitcoin

After Frau Merkel, also known as "KGB Major Ivanova", left the post, Germany ceases to be a court servant of Russia, and begins to take independent steps. Bravo!!! Now a complete renunciation of coal supplies from the country of the world terrorist has been announced (until the end of summer), and a complete embargo on the supply of hydrocarbons from the killer country, until the end of 2022. Germany ceases to be a servant of the Kremlin!

I wonder what they are going to do with the seized coins now. They will have few options:
1. Keep them as evidence 🧾 eventually not doing anything else for few years
2. Sell them and keep fiat in government funds
3. Keep them as government funds ( hold them)
If they do decide to sell them to the bidders the market might go up and down, at the same time one should understand that Russians are right now trying to convert their money into bitcoins ultimately finding a way somehow to manage through sanctions. But EU made it clear that bitcoins was covered under the sanctions as well therefore I do think that more countries might try and seize Bitcoins from the Russians and it might affect the market as a whole but we must understand that this is important as well and be patient and hold our coins if the price goes down 👇

I doubt this has anything to do with that, government's have been such darknet markets since they first started popping up. What I am surprised by is the huge bitcoin booty they got from it. That paid for the whole operation tenfold. I wonder how come there aren't many other crackdowns of such marketplaces. Maybe it's just that it actually takes a long time to really take them down.

This is what I thought off originally. Then I began to search for what happens to seized items when it is money or an asset that has value.

Some of the articles wrote that they use it for

• Payment for training officers
• Buying of equipment
• Being used in buy-bust operations

Basically, anything that makes their job easier and I think it's a great way to use it. I'm not sure about seized cryptocurrencies though.

25 million dollars is nothing in the grand scheme of things. That is basically one days worth of energy Russia gets paid from just a single nation let alone all of Europe. They may not be aware of this, but it is really a tiny amount. Of course putting bad people in jail and getting their money is a big deal, it shouldn't matter if they were Russian or not, and even if it was, it is still great that they were caught and the money was confiscated as well.

We had like billions of dollars owned by Russian oligarchs frozen and seized, if that didn't hurt Russian economy then I do not know what would. Definitely not some darknet getting shut down.

That amount is indeed small compared to what they are accumulating throughout these days. But at least, German authorities are doing something to cripple their possible source of funds. They may not get the large amount but if they will continue to bust this kind of activity, accumulation of small things will go a long way. As we don't know how much they are collecting throughout these years, these authorities are just hoping that they can remove some of their sources of funds. But I think, even if they taken down this site, they will always find a way how to create a new one.

We're talking about coins so using it for buy-bust operation is very much unlikely.

Take a look back at what the US Government did to the Silk Road bitcoins if you want a better comparison. They were all sold in separate auctions. Germany may have different way of doing things but I don't see why they wouldn't follow the same strategy.

The German government could also look at the option of just keeping it for obviously the world is capitalizing on cryptocurrency.  Countries are already considering BTC as legal tender. Auctioning it will be a loss for them. I think US could have gained much is they didn't auction the confiscated BTC from Silkroad to Drapper.

They basically got the BTC for free unlike Bukele that had to buy from government funds, they could just print money to pay officers training and equipment.

This has nothing to do with Russia's invasion of Ukraine and the west's imposition of sanctions on Russian oligarchs.

Darknet markets have always been closely monitored and shut down. This Russian site has been under investigation for months and has now fallen down finally. Despite confiscating only $25 million in Bitcoin, Hydra is a bigger fish. It is even considered as the largest darknet marketplace in the world today.

The problem, however, is that there are no bad people jailed here. Nobody is even caught. Catching the people behind Hydra is going to be another mission for the authorities.

Man, that's a lot. I reckon they paid off whatever they actually spent tbf. Would the entirety of the seized amount be under the German's jurisdiction or would they split off some with the U.S.? Since they helped with investigations and all.
Wasn't there a case where there was also a seizure of coins that happened and said coins were auctioned off by the government? I reckon the same thing would happen here. Now as to what they will use the money gained from there, well I reckon that's still up for debate. Probably for public facilities or something along those lines.

and where did they take the 25 million? will they keep it for themselves or share it with US authorities?

The German seized it, so they will have to keep it, US though is there to help and maybe provide technical support for them.

And as others seized illegal and tainted bitcoin, usually the state uses the option to sell it below market price through auction. So let's see how the German government will do that and maybe the US might have also advise that route as well.

oh I see,,,, hopefully the german government allocates the money from the sale of bitcoins for something useful,,, instead of corrupting it or using it to buy oil or gas from the black market lol

In general any seized funds will goes to the government treasury so I assume the same will happen to these bitcoins as well and it will be there for almost forever but really 25 million is the biggest of black market then why all thise government claims that bitcoin wirth almost trillion dollar marketcap is only used for illegal activities?

As for the crypto. Each government and even at times each department within the government has their own rules for disposing of confiscated property.
As for the why now. I really don't read much into that. Investigations take time, and digging into who controls what and where takes time. It started 8 months ago, and I'm sure they could have slammed the door on it at any time after a few months, but this is legal work within the government. They took their time and did it right.

-Dave

Maybe that's good a piece of news to shutdown these darknet markets providing unhealthy and unsafe drugs, however, regardless of that as I can see there are still some other marketplaces on the darknet providing these kinds of services and they still use the name Hydra however some of them can be unreal and scam, on the other side of the story I'm wondering how the police are going to spend the money they got, some articles said that's will be used to train police officers but I will have doubts on that. 

Maybe that's good a piece of news to shutdown these darknet markets providing unhealthy and unsafe drugs, however, regardless of that as I can see there are still some other marketplaces on the darknet providing these kinds of services and they still use the name Hydra however some of them can be unreal and scam, on the other side of the story I'm wondering how the police are going to spend the money they got, some articles said that's will be used to train police officers but I will have doubts on that.

I don't think it's a huge deal in terms of seizing Russian funds or fighting Russian crimes, but it's still nice that, apart from sanctions, a dark net market was shut down. What is triggering a bit is that Germany did this. They seized 25 million dollars here, but they're paying literally billions of dollars to Russia for gas, so in terms of fighting Russian financial routes and capabilities, it's a drop in the ocean, and it's hard to diverge anything about Russia from its war against Ukraine now and not compare the assets and their impact. IMO right now, fighting a terrorist state and stopping financing the war that's leading to what some now call a genocide is more important than a drug-dealing dark net market, but since the investigation started a long time ago, these are just not connected to each other.

The federal authorities that seized the Silk Road crypto held onto it and then auctioned it. IIRC there were some investigators that had tried to steal some portion of the Bitcoin that was confiscated from the matter but was not successful. If Germany is smart they'd just hold onto it instead of selling it and keep it secured. If the feds had waited, they would have not lost out on hundreds of millions - they sold in 2015.

Not sure how the German authorities deal with seized funds, but hopefully they're more fair than the US and some other countries, who'd just either keep the loot for their own purposes or have higher-ups embezzle everything (like the DEA or FBI did with the Silk Road bitcoin; can't remember which alphabet agency employees who did that).

I've never heard of Hydra Market, which is a bit strange.  If it used significant amounts of bitcoin, you'd think it'd at least get a mention on bitcointalk, but I can't remember anything of the sort.

Because logic and headlines more often than not don't mix well.  I can't believe how many people believe everything they see on the news or read online.  And with this, it's the same tired old argument that since bitcoin is and always has been used for illegal activities, it must be inherently bad.  The counter-argument, of course, is that government-issued currency has always served the same purpose and is still the most anonymous way to deal in illegal goods & services like drugs and murder-for-hire.