Way back in the earlier days of bitcoin (), before all these blockchain startups started giving cryptos a better name, the most famous use for them was on the . Online markets cropped up, and trafficking in illicit goods picked up quickly to meet demand. The most popular being the infamous marketplace, but others like , , and helped support this growing ecosystem. Tagging closely along was the internet of money: bitcoin.
Digital Entrapment: German and Dutch Authorities Take Down Hansa
Since then BTC has grown up quite a bit and found its place outside of just illegal markets. That being said, authorities still spend a lot of resources tracking other, lesser-known markets down in a game of whack-a-mole. One dominant force in the scheme is the Netherlands.
The Dutch Police are all too familiar with this, and back in 2016, they had another idea for the dark mart known as . Interestingly, they didn’t take it down, but instead, take it over.
Going off of a tip from the security firm , the Dutch Police managed to gain access to a Hansa development server. Typically, this wouldn’t be enough to find out anything besides anonymized chat logs and nearly untraceable transaction details.
When people criticise bitcoin and other cryptocurrencies, they say it will "enable the dark net." But governments don't really fear the dark net — they just don't want us to have one too.
— Andreas M. Antonopoulos (@aantonop)
However, following a misstep on the part of the Hansa developers, logs from an outdated messaging system containing the full name and one of the addresses of two of the alleged founders of Hansa were confiscated by authorities.
Luckier still for the police, was that these two men were just over the border in Germany and currently under investigation for selling pirated ebooks and audiobooks on a site call .
As the Germans were making their arrest, the Dutch used this as cover for their plan. They were to set themselves up as the new administrators for Hansa.
Concurrently, in the US, the FBI were working on their investigation of the AlphaBay servers. At the time AlphaBay was the biggest darknet market, but as they were about to be taken down by the feds the users and dealers would be looking for a new place to set up.
This move placed the Dutch in the perfect position to become the administrators of a burgeoning marketplace, Hansa, as a flood of users would be coming.
The Germans raided the admin’s house, who left their hard drives unencrypted and handed them over to the Dutch team investigating the case. From there, Dutch authorities were able to use the information gained from them and the suspects to log in as admins.
At the same time the FBI did their takedown of the AlphaBay, and suddenly a growing Dark Web market was in the hands of the Dutch task force.
During this time over 5,000 users, a day registered to Hansa, eight times the average registration rate, and all immediately fell under police surveillance.
The code was rewritten on the site to log every password unencrypted, including messages which in most cases gave the full home address of the buyers, and the metadata of all photos was given to the police including the location of where the photographs were taken.
Quality Control
Interestingly, as a whole team of officers were impersonating the two admins, whenever a conflict occurred that needed to be settled by the admins they were more than ready to deal with it way better than two men alone could.
The quality of the site actually went up during the task force’s take over, and users were reportedly very content with the service.
Due to this increase in quality of the site, it quickly became the number one destination on the dark web for the illicit market.
After 27 days and nearly 27,000 transactions, all this data became unmanageable, and they took down the site, leaving a notice with a list of identified sellers and buyers and this :
“We trace people who are active at Dark Markets and offer illicit goods or services. Are you one of them? Then you have our attention.”
In the end, a couple dozen of the top sellers were arrested, 1,200 bitcoins were seized, and the reputation of dark web markets has been forever tarnished. Though it will recover somewhat, many users are more than a bit wary of using services like this again.
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One of the areas that became extremely popular during the rapid rise of bitcoin during 2017 was that of . While in the formative years of the world’s first cryptocurrency, individual miners were able to compete without having ultra-expensive mining rigs, this is no longer the case.
The space of mining is extremely these days, with large warehouses being full of top of the line hardware that mines around the clock. The competitiveness of mining has driven individual miners towards mining pools and more expensive equipment if they want to remain profitable in this space.
One of the leading companies in the cryptocurrency mining hardware sector is . It was revealed recently that they have been creating new facilities quietly in the Pacific Northwest of America.
Why is This News Notable?
Bitmain has not yet publicly announced their developments in the United States, but it appears they are involved with a newly formed company named Ant Creek. Ant Creek has been in the process of developing mining facilities located in the state of Washington.
A Bitmain co-founder Jihan Wu is the only named governor of Ant Creek as revealed by a business data . The company was started back in June 2017 in the state of Washington as a for-profit company.
There has been no address listed for this company, but according to the , the city known as the Port of Walla Walla is currently contemplating entering a land agreement with Ant Creek. If the city approves this agreement, it would see the company enter into a lease starting in January 2019, alongside an additional option allowing them to buy a maximum of 40 acres.
It is believed that if this deal goes through, there will be a cryptocurrency mining facility built and operated on this land. The deal would be a significant move due to the potential size of this operation.
There is also the nature in which this move is being made, with not a lot of noise coming from those involved. No public documents have linked Ant Creek and Bitmain which showcases that the concerned parties may want to keep this quiet.
The report showcases that these mining facilities are past the initial development stages. It discusses the potentially 15-20 new jobs that would be generated for the city, as well as between $7 million and $10 million in private investment that would go into the region.
Why Would Bitmain be Making This Move?
As Bitmain currently have most of their operations based in China, they are looking overseas to create new facilities due to on cryptocurrency mining in China.
There have been certain energy parameters placed upon mining companies in the country, which is why the likes of Bitmain have been looking at locations in Switzerland, and apparently now the United States to create new facilities.
Switzerland is very crypto-friendly, while the likes of Canada and the United States have fewer energy restrictions than China, as well as having the framework to support large-scale mining operations.
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The price of altcoin NEM (XEM) increased by nearly 19 percent today following the news that Japanese cryptocurrency Coincheck has completed a promised refund to customers and resumed some trading services. In a report from the Japan Times, the Tokyo-based exchange distributed ¥46.6 billion ($440 million) to all 260,000 customers who lost their holdings of […]
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