Desnake’s return**
The marketplace was shut down in July 2017 following coordinated action between authorities from the UK, Thailand, Canada, France, Lithuania, and the Netherlands. Canadian citizen Alexandre Cazes, known as ‘Alpha02’ and ‘Admin25’, was identified as the creator of AlphaBay and arrested. Cazes suddenly died in Thai custody in March 2018 in an apparent suicide, though this is disputed by Desnake.
**Desnake has timed his reappearance well. For the first time in history, the world of darknet marketplaces lacks a dominant leader. This is due in part to recent law enforcement successes, but also to increased exit scams by surviving actors, and most notably the closure of Hydra marketplace in April 2022 by German Authorities.
Both AlphaBay and ASAP marketplace are relatively small compared to prior darknet giants. AlphaBay hosts 30,000 product listings, while ASAP hosts 50,000, though ASAP is known to allow vendors to duplicate listings.
**AlphaBay’s strategic vision is manifesting in technical innovation. This is apparent in its AlphaGuard technology – a system that allows users to withdraw all funds and settle disputes in the case of the seizure of any or all servers. AlphaGuard has been in development for two years with a standalone trial period of one year.
AlphaBay has also developed a proactive solution for dispute resolution, another common darknet marketplace problem. The Automatic Dispute Resolver (ADR) System uses a variety of measures such as extended escrow times, full and percentage refunds, and replacement options to streamline dispute resolution without involving a third party.
The third technical innovation is AlphaBay’s Trust Level (TL) methodology for risk rating users. Without requiring any additional personal data, AlphaBay has developed a TL rating system using network effects where users rate each other as trusted or distrusted.
TL scores are moderated with warning points, where too many leads to account limitation. TL scores are visible to vendors when a buyer places an order and before the buyer’s personal information is revealed to the vendor to maintain a double-blind system through to escrow. Through the TL methodology, AlphaBay is drawing on game theory principles to minimise fraud.
From Bitcoin to Monero**
Moving to Monero as the currency of choice is part of a wider trend in the darknet world. Of the 61 darknet marketplaces profiled by Hoptrail, over half support (or supported) privacy coins such as Monero, ZCash, Dash, and others.
I2P, or Invisible Internet Project, is a peer-to-peer anonymous network where each client in the network is automatically made into a node through which data and traffic are routed.
Presently, AlphaBay can be accessed through Tor mirrors, though this will change in the future.
Challenges ahead for exchanges**
AlphaBay’s ambitions are the most far reaching of any darknet marketplace actor and pose new challenges for blockchain analytics and law enforcement.
More broadly the co-opting of Monero for use by AlphaBay and its wider presence on the darknet presents bigger AML headaches for exchanges.
The re-rise of AlphaBay is disrupting the darknet marketplace ecosystem, but the ripples will be felt across the digital asset industry.