Darknet marketplaces have embraced cryptocurrency quite some time ago. Most platforms now accept Bitcoin, although some service providers have explored Monero and Ethereum options as well. Unfortunately, there is one big threat looming over darknet markets. Some of these platforms will disappear overnight in what is known as an “exit scam.” We have collected three recent incidents to illustrate this point.
3. East India Company
Although the name would not suggest it, East India Company was a notorious darknet market which disappeared in early 2016. The platform had seen its fair share of problems in the past, though, as they were hacked in August of 2015 and lost 30 Bitcoins. However, the company successfully regained some of its popularity afterward, and a lot of users slowly made their way back to the platform.
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Things started to get out of hand in January of 2014 when the platform became inaccessible for several days. With no response from the administrators, there was a valid reason to start panicking. It did not take long until user’s Bitcoin wallets started getting drained, although no one knows exactly how much funds have been stolen. It is one of the biggest darknet market exit scams over the past few years.
One of the first darknet markets to experiment with Monero payments went by the name of Oasis. Past tense is more than warranted here, as the platform suddenly went dark in late 2016. It appears a lot of users were effectively scammed before the company disappeared, which resulted in at least 150 Bitcoin in losses. The amount of stolen XMR was never officially confirmed, but it is believed it was quite substantial.
Things had been looking quite positive for Oasis, as many people felt the platform was legitimate. Moreover, its user base continued to grow exponentially, and Oasis could have turned into one of the primary darknet marketplaces we know today. Unfortunately, the administrators took the easy way out and stole money in the process. It serves as a stark warning for anyone using darknet markets, that much is evident.
Virtually everyone will remember the Evolution marketplace exit scam, as it made quite a few mainstream media headlines. During the heist, it is believed over 40,000 Bitcoin were stolen in 2015. At that time, these coins were worth about US$12m, however no one is certain if they were actually sold across exchanges. If the thieves still have a portion of this money in possession, they will make bank quite easily.
At the time of this notorious exit scam, Evolution was one of the biggest darknet markets around the world. Although it is not the biggest darknet market exit scam in history, it is the biggest since March of 2015. All funds kept in escrow was stolen by either the administrators or someone who successfully hacked the platform. None of the funds were ever retrieved, unfortunately.
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