Wall Street Marketplace: A Dark Web Exit Scam (Dark Web Vol 09)

Introduction

The “free market”, or a “marketplace of ideas”. Euphemisms? Perhaps. Naively idealistic? Oh most certainly. The notion that a market can be established around any and every “need” or “demand” sounds great. In theory. When one actually takes into consideration the darker aspects of human nature; greed, vice, etc. then it should come as no surprise that places like today’s subject, Wall Street Marketplace (or WSM) come into existence periodically.

99% of all crimes are those “crimes of opportunity” and when you have the near complete anonymity of the dark web coupled with untraceable bitcoin transactions then such dens of inequity don’t just become highly likely but they become inevitable. And maybe that’s what today’s story is really about: the inevitability of things brought about by situations and how intrinsically connected all these events truly are.

Chapter 1 - Three Germans and a Brazilian

“The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy” -Milton Friedman

If a good or service has a demand then it is marketable. That is what they say at least. Some “goods” and “services” have been deemed by wide sections of society to be unacceptable. Purchasing illegal drugs for instance is frowned upon in most societies and in some places merely having an illegal substance in your possession is a death sentence. Marketing other services such as hacking skills or software, murder or theft for hire, all things that are taboo to offer. Yet, all things that are in demand.

Seeing the demand for these and other illicit goods and services, and in the wake of the downfall of the darknet marketplace Silk Road and other nefarious markets, three German men, Tibo Lousee (aka “coder420”, aka “codexx420”); Klaus-Martin Frost (aka “TheOne” aka “The_One” aka “dudeboy”); and Jonathan Kalla (aka “Kronos”), began the Wall Street Marketplace.

Their services were easily accessed by using a Tor browser, and signing up for a free account using a moniker and password. Once registered the services offered were wide and varied. Some of the categories available to browse included: “Drugs”, "Counterfeits”, “Jewelry & Gold”, “Carding Ware”, “Services”, “Software and Malware”, “Security and Hosting”, “Fraud”, “Digital Goods”, and “Guides and Tutorials”. And each transaction was handled through that lovely, untraceable crypto-currency known as bitcoin.

Over the course of three years, 2016-2019, the WSM marketplace would host 5,400 vendors selling to 1.15 million people worldwide, aiding and abetting the entire rainbow of crime. From the marketing of illicit drugs such as marijuana and methamphetamine to fake or stolen identities you could find it all right here on the WSM.

Another prominent figure in the WSM’s day-to-day administration was Marcos Paulo De Oliveira-Annibale, of Sao Paulo, Brazil. Annibale was a moderator, who among other things mediated disputes between vendors and their clients. One can only imagine what these disputes may have looked like and just what “mediating” them might have entailed. Annibale was also something of the “public relations” guy for the marketplace, having been the one who went to sites such as Reddit and made promotional posts for the WSM.

Drug distribution on a global scale, money laundering, and a whole host of other criminal activity occurred under the auspices of the WSM administrative team. But of course it was only a matter of time before the law came investigating this world wide network of shady dealings.

Chapter 2 - Seedy Underbelly

Just like every city has that one neighborhood you should avoid, the one where leaving your car parked unattended is just something you don’t do; so too does the internet have its “wretched hives of scum and villainy”. These places take many forms: The Silk Road, AlphaBay, or the forebear of today’s subject German Plaza Market. The amount of things you can find on these darknet marketplaces is truly staggering. The basis of appeal is the complete anonymity the dark web provides.

With the rise of crypto currencies the world over, committing cyber based crimes has never been more lucrative. The untraceable nature of block chain transactions make them the most secure way to move money from one place to another without drawing attention to the transaction.

The proverbial noose began to tighten in 2017 when full blown investigations into The Administrators began to take shape in three countries with a veritable soup of alphabet agencies beginning an international effort to identify and detain the heads of WSM. And the charges really ran the gambit: trafficking of illegal narcotics, malicious software, stolen financial data, counterfeit goods, “and other contraband” overwhelmingly topped the list.

But this made inevitable the second crime authorities really seemed to pursue against The Administrators: Death Resulting from Distribution of Fentanyl. When everything is laced with the most potent opioid on the planet, and you facilitate the distribution of millions of dollars worth of narcotics all over the world then it becomes inevitable that eventually this kind of thing is going to happen. Nor is it something to be taken lightly when it does.

Chapter 3 - The Exit Scam

This is the part that made this story jump out and really get my attention; The Administrators were aware or at least suspected they were being investigated. However it wasn’t until they pulled one big virtual heist that the full weight of law enforcement came down upon them.

For three years WSM operated on the dark web, facilitating countless crimes of every nature. As is common in large markets the virtual currency was held in marketplace escrow while the vendors delivered their illicit goods and services. And in April of 2019 as the law enforcement of three countries began to get closer the administrators of WSM decided to abandon ship and diverted around $11 million into their personal accounts in what amounted to a huge virtual heist.

On April 16 the vendors of WSM found they were unable to withdraw their virtual currency being held in escrow which is ironically what actually triggered the German authorities to execute a series of arrest and search warrants. After years of monitoring several computers based in Germany and The Netherlands to host the WSM (or GPM) servers or facilitate transactions the authorities had been able to ferret out the three German men and within days the Brazilian accomplice and bring an end to the pre-eminant dark web marketplace of the late 2010s

Chapter 4 - Investigation and Other Accomplices

The three defendants were alleged to operate a sophisticated online marketplace where buyers could engage in encrypted communication with vendors but also an online forum where they could discuss various vendors and the quality of their wares or services. As the investigation played out it was discovered the three primary suspects had previously operated another German based darknet marketplace, and they were able to tie several computers based in Germany and The Netherlands to use in both the previous GPM site and WSM. 

Part of what The Administrators did were maintaining the website, and operating the marketplace to ensure vendors and buyers could access each other and that financial transactions were properly processed, meaning they had full access to the virtual currency that passed through the marketplace.

One of the big breakthrough moments for the entire investigation was when one of the defendants accessed the WSM computers using a VPN (Virtual Private Network) however the VPN connection failed and his IP address was revealed, allowing them to find his specific location.

Another key part of the investigation were the presence of an undercover special agent from the FBI, who purchased a “fullz”; or a “full set of identifiers” (name, Date of birth, Social security number, address and credit card number), of a resident of California from a vendor on WSM, known as DavidCVV.

Law enforcement also managed to identify two of the largest drug vendors on WSM, Platinum45 and Ladyskywalker. Both were subsequently arrested for their activities within WSM and other darknet marketplaces.

Conclusion

At the time of writing this particular case is about six years old having been concluded in 2019, so it goes without saying that another bazaar of the bizarre has likely come and gone in the intervening years, perhaps someone listening to this could even tell you the name of the heir apparent.

But as long as people have their vices, and as long as society seeks to regulate and curtail certain behaviors then places like WSM will always find a way to exist, they will always cater to the needs of people with dark desires, and they will always do these things as long as there is money to be made doing them. I will leave you, again, with the words of Milton Friedman, the father of economics “The black market was a way of getting around government controls. It was a way of enabling the free market to work. It was a way of opening up, enabling people.”