Hydra’s story is truly epic. It is the world’s largest and longest-running darknet market. Its beginnings are mainly unknown, though we do know that it first opened for business in 2015. The story concludes with the market being taken down in early April 2022 in a joint effort by German and US authorities, culminating in the arrest of its suspected primary operator in Russia the following week.
This article delves deeply into the inner workings of this “mother-of-all-darknet-markets,” providing context for its rise to dominance while also speculating on where things might go in the aftermath.
Hydra experienced extremely little downtime for the majority of its existence, closing for only a brief moment amid the peak of COVID’s impact in 2020. According to Dread forum administrator Paris, the market had a highly advanced Tor implementation that allowed it to remain online even through the most intense DDOS attacks. It has been speculated that it profited from high-level contacts in the Russian government, which may have contributed to its longevity, however this has never been verified.
Hydra is thought to have been responsible for 80% of all darknet market transactions during its last few years of operation, with about 17 million registered users and 19,000 active merchants, or “shops,” as they were called to on the market. Hydra managed to collect more than $5 billion in bitcoin during the duration of its lifespan, which was little under seven years. As a result, it is undeniably the largest darknet market of all time.
Hydra was not only the world’s largest darknet market (by far), but it was also the most dangerous. We don’t mean “bad” in the usual sense, but it was merciless in its pursuit of dominance, going to tremendous efforts to eliminate competitors. Hydra also facilitated more unlawful activity than any other darknet store. This is owing not just to the extent of its illegal item sales volume (mostly drugs), but also to its role as a significant conduit for money laundering operations from all over the world. In essence, it was a multi-headed criminal organization like a modern-day cyber mafia.
Hydra was largely vital as a crypto laundering service for many cyber criminals in Russia and the surrounding CIS nations. Users could not only cash out crypto incognito for rubles via exchangers such as QIWI, Tinkoff, or Yandex.money, but they could also physically pick it up in pre-disclosed areas where it had been buried or hidden using a dead drop system known as klad, or “treasures.” This technique was also used for a considerable amount of market medicine sales and is still used by Hydra’s successors today (though now primarily for drugs only).
Hydra, a Russian-language market, served not just Russians, but also individuals from Ukraine, Belarus, Kazakhstan, Azerbaijan, Armenia, Kyrgyzstan, Uzbekistan, Tajikistan, and Moldova. It solely took Bitcoin as a payment option, however it did offer cashouts to a number of money-transfer firms. Despite its reputation for ruthlessness, Hydra shops followed a set of moral guidelines that prohibited the sale of weapons, poisons, contract killings, explosives, carding, “secret state information,” fentanyl, pornographic materials, viruses, and “other tools to commit criminal activities through cyberattacks.”
The Definition of ‘Hydra’
Hydra is a legendary monster that assumes the shape of a serpent and dwells in water. It also features a variety of heads, which was meant to represent the idea that even if part of the market was destroyed, the remainder of it might reassemble and continue to exist. This was an especially relevant attitude during Hydra’s early days, denoting power in a kind of spiritual immortality. Although this was not the case, it is almost clear that several of Hydra’s former administrators and staff have gone on to newer darknet market ventures.
After local police took down the Dutch market Utopia in February 2014, one of the Silk Road forum’s moderators hailed the takedown as “a significant blow to the darkweb marketplace community,” rallying his group with the words:
“Prove to them that you and I are hydras—cut off one head, and 10 more sprout up.”
Since then, the Hydra has represented the darknet market ethos, demonstrating to law enforcement and other skeptics that market operators would not give up. It has also been the name of a few of other darknet markets around the world.
Hydra statue from Greek mythology.
Following Hydra’s closure in early April 2022, numerous other Russian-language darknet markets sprouted up or stepped up their game to fill the former giant’s shoes, trying to capture part of the estimated hundred million dollars in monthly commerce Hydra saw. While these operations have had some success in this area, it is probable that no other darknet market – Russian or otherwise – will ever surpass Hydra’s size and dominance in the DNM scene.
RAMP
RAMP (Russian Anonymous Marketplace), one of the first Russian-language darknet markets, was launched in 2012 and operated until September 2017. Drug dealing on Russian darknet sites dates back to 2009, when conversations on forums led to private transactions conducted over encrypted communications.
RAMP was preceded by at least one darknet market, known as R2D2, which started in May 2012. Amber Road, Malina, and, most importantly, RuTor quickly followed. However, for the most part, these sites were not well-maintained, and they swiftly fell into the hands of a formidable competitor, RAMP. R2D2 was brought down by a series of catastrophic DDOS attacks as a result of RAMP, Malina’s admins were doxed to Russian law authorities, and Amber Road’s sellers were simply allowed to re-establish on RAMP.
The RAMP logo
RAMP’s chief administrator was known as DarkSide (also known as Big Boss and Maharaja), and his avatar was a bruised Edward Norton. The market is projected to have made $5.5 million per year on average. RAMP paid sellers for starting a shop on their site as well as for each item they displayed, rather than collecting commissions on each transaction. They also made money through banner adverts that appeared on the market’s homepage.
For the first several years of Russia’s darknet market boom, item dead drop sites were offered over the encrypted messaging program Jabber. RAMP introduced the notion of “auto-shops” in early 2014, revolutionizing the drop process. Buyers could choose from a range of pre-stashed things (commonly referred to as “readymade treasures”), receiving its exact coordinates for collection instantly after paying for the order in Bitcoin. RAMP’s auto-shops were a huge success, resulting in a large increase in its user base.
Russia’s Great Darknet Market War
By mid-2015, RAMP’s only prominent competitors were WayAway and Legal RC. Both markets specialized on the production and sale of synthetic substances, such as THC substitute “spice.” Fearing that they would be crushed next by RAMP, the two markets banded together under a new name: Hydra. While RAMP dominated Russia’s large metropolitan areas, catering to customers who could buy higher-quality medicines, Hydra catered to individuals in rural areas who had less money to spend.
This turned out to be a blessing in disguise for Hydra, since a string of arrests of corrupt customs officers in 2016 inflicted a significant blow to the drug import channels RAMP shops relied on to service their consumers. Due to a scarcity of imported drugs, hundreds of marijuana fields, as well as clandestine drug labs producing methamphetamine and mephedrone, sprouted up around the country.
RAMP (red) dominated Russian areas vs. Hydra (blue) in 2015. Lenta.ru is the source.
The purchase of chemical precursors from China, which was dominated at the time by Hydra, became increasingly vital to RAMP’s survival, and the company then attempted to hijack old trade lines by bribing Legal RC’s former manufacturers. The plan ultimately failed, inspiring Hydra allies to work against RAMP by launching a series of intensive DDOS strikes against their adversary. By early 2017, several big RAMP shops had been forced to retire, their supply lines severed and no way to obtain new product. The market’s demise was hastened by the resignation of its co-admin, Orange, who feared Hydra had compromised his identity and was considering a hit on him.
Stereotype, the market’s newly appointed co-admin, firmly prohibited RAMP shop owners from helping or associating with Hydra in any manner, threatening those who disobeyed with not only being kicked off the site, but also having their information turned over to law enforcement. The latter punishment was indeed meted out to one specific shop, with the arrest of its vendors making headlines in Russia. This shattered the spirits of RAMP’s remaining sellers, who were already struggling with sales due to the site’s continual DDOS-driven downtime.
By mid-2017, a huge flight of RAMP’s chemical manufacturers and distributors to Hydra had begun, quickly followed by smaller shops and, finally, customers. The arrest in July 2017 of entrepreneur Alexander Vinnik, a Russian citizen who was the owner of BTC-E: a cryptocurrency exchange on which RAMP stored a large amount of assets (including $60 million in customer deposits), dealt the ultimate blow to RAMP’s political power. Vinnik was apprehended while on vacation in Greece at the behest of US authorities, who suspected him of utilizing the exchange to facilitate the laundering of stolen or otherwise illegally obtained cryptocurrencies.
In October of 2017, Alexander Vinnik left a Greek courthouse. Associated Press
RAMP was finally shut down two months later, in September 2017, when its servers were decommissioned by Russia’s Ministry of Internal Affairs. In September 2019, it was revealed that Darkside, the market’s original architect, had likely died of a heroin overdose in August 2015, and that Orange had surreptitiously run RAMP on his behalf for the last two years. Darkside was an ardent gamer who had stopped checking into his game-related accounts around the time of his reported death, lending credence to this theory.
“When RAMP was shut down due to its team’s lack of qualifying, we were left with no competitors.” RAMP and Hydra varied from the start, much like television and the internet.” – Hydra executive ‘Satoshi Nakamoto’
Iklad, Blackmarket, Solaris, and RuSilk are among other Russian-language markets that competed with RAMP and Hydra.
The Rise and Rise of Hydra
With RAMP out of the way, Hydra basically established a monopoly over the Russian darknet business. Its tendrils stretched far and broad, into a variety of operational domains. Such areas included sophisticated public relations and clearweb marketing efforts. A few incredibly successful video advertising for the market were also put on YouTube on an official channel administered by Hydra itself. When they were removed, other ones just appeared, sometimes under different channels, to take their place.
When Hydra’s YouTube channels were eventually blocked, the market shifted to the Russian video hosting service VKontakte, where their videos received tens of millions more views. Hydra also spent a lot of money on email spam operations before moving on to messaging apps like WhatsApp and Viber, appearing unafraid of attracting the notice of any entity that could seek to destroy it.
Hydra’s Telegram channel was the crown jewel of its social media efforts, into which it lavished millions of dollars throughout the duration of its life. Hydra began purchasing posts on prominent Russian language Telegram channels in July 2017, but having its own channel provided the benefit of providing a basis for other media operations. They utilized it to showcase lengthy articles about drugs, market-related memes, and even special bargains by car dealerships, which were the market’s primary source of money.
Hydra was already larger than all other darknet markets combined by 2018. Chainalysis is the source.
Hydra also benefited from a streamlined administrative system, in which the top admin (who went by the suitable name of Admin) oversaw six very devoted moderators, all of whom were in charge of resolving disputes, moderating reviews, and engaging with VIP-status clients. Moderators reported directly to Resident, the forum administrator, who was aided by a deputy administrator named Burning Man. Hydra also had a main developer that reported to Admin and a public relations director. In addition, the market featured two other executive-level people – Observer and Satoshi Nakamoto – who had no formal job but counseled Admin on crucial topics.
Hydra’s ability to achieve such success was substantially aided by its rigid, military-style line of command. Aside from individuals recruited to hide drugs for the death drops (“kladsmen”), for whom jail time was a near certainty, Hydra’s administrators, moderators, makers, wholesalers, and shop owners were doing well. There was little to argue about as long as everyone was generating money, and having monopolistic powers meant that any prospective competition was easily stamped out or swept into obscurity.
Hydra had a significant increase in tourists from all around Russia in the first half of 2019. By July, some regions were sending ten times as much traffic to the market as they did at the start of the year. By October, it is believed that purchasers were retrieving over 13,000 dead drops per day, totaling around $3.5 million in drug transactions. At the time, the market was receiving approximately 800,000 visitors every day. Hydra was responsible for 75% of all bitcoin assets moving to darknet markets by 2020. It was also the sixth most popular bitcoin service in Eastern Europe that year; no other region of the world had a darknet market among the top ten cryptocurrency services.
Bitcoin.com News is the source.
The First Contract Killing on the Darknet
However, not everything was perfect for Hydra at the time. In late March 2019, it was revealed that the previous year’s murder of a high-ranking police investigator in Russia was the result of a contract killing; the position had been offered in a wanted ad on Hydra’s site. Yaroslav Sumbaev, a hacker, had been under investigation for electronic and bank fraud since 2014, when some of his colleagues were apprehended by the investigator.
Sumbaev was pushed into hiding after allegedly defrauding thousands of visitors out of millions of rubles. In 2018, he began selling narcotics on Hydra, and in September, he advertised the assassination of the investigator. A 19-year-old named Abdulaziz Abdulazizov responded by posting his own wanted ad on the site for an assistant, which was answered by a 17-year-old forum user at the time. Sumbaev agreed to pay one million rubles, or approximately $15,000, to be split between them for the murder of the investigator.
Abdulazizov and his assassin, agent Yevgeniya Shishkina. BBC News is the source.
On October 9, 2018, Abdulazizov traveled to Krasnogorsk, a wooded region outside of Moscow near the target’s residence, where he retrieved a stashed, modified weapon prepared and left for him by his hired companion. He then went to the investigator’s house and, after briefly losing his composure, fired two close-range shots at the target, killing her within minutes.
Though Abdulazizov used his attendance at a local performance as an alibi and the reason for his travels, his narrative would be unraveled when it was discovered that he had hired a taxi using an app to depart the site of the murder. He evaded capture until his arrest in March 2019. Sumbaev was recognized as the crime’s architect and arrested in November 2018 by Georgian authorities, who eventually gave him over to Russia in October 2019. The episode was disastrous for Hydra’s public image, which was already tarnished as a result of the market’s facilitation of a nation-wide drug addiction epidemic.
Hydra’s Last Days
In late 2019, Hydra set another darknet market record by being the first to hold an ICO, raising $146 million for the goal of expanding to a Western audience. According to a market-hosted ICO sales presentation, Eternos will “launch a new era in the West” in darknet markets, with “the scope of expansion difficult to comprehend.”
The Eternos project was supposed to begin on September 1st, 2020, but development was delayed earlier this year due to COVID difficulties. After the launch date passed, there was little talk about Eternos, and the project never saw the light of day.
Lenta.ru produced a jaw-dropping exposé on Hydra and its battle with RAMP around the same time as the Eternos ICO, which garnered it multiple prizes. This caused the Russian government to pass a measure asking for harsher drug restrictions in the country, which resulted in the arrest of many Hydra shop owners in the months that followed.
In 2021, a wave of cybercrime engulfed most of the world, drawing even more attention to Hydra after it was discovered that a huge amount of ransomware revenues were moving through the market, laundered through the normally untouchable payment processors it used. Hydra’s biggest year in terms of revenue was 2021, when malware attacks got more profitable and lucrative than ever before.
Yearly revenue for Hydra. Elliptic is the source.
However, luck would soon run out for the darknet titan, as a concerted international law enforcement effort resulted in sanctions against the market by the US Treasury Department and its servers being pulled offline in Germany on April 5, 2022. Many in the darknet market community anticipated that Hydra would just reappear under a new URL in the weeks following the takedown, but this proved not to be the case, and the reality eventually sunk in that Hydra had been finally murdered.
Surprisingly, no arrests were made by German police in connection with the removal of the market’s servers in that country. However, Hydra’s accused administrator, Dmitry Pavlov, was detained in Russia the following week and later told BBC News in an interview that the charges against him were unfounded. “We are a hosting company with all the required communications licenses,” he explained. “We don’t manage any sites; instead, we rent out servers as intermediaries.” He is being detained while awaiting trial in Moscow.
Markets for Russian-Language Products in the Post-Hydra Era
The loss of Hydra created an extraordinarily lucrative void, which other competitors attempted to fill almost quickly. For the first several months after Hydra’s demise, Russian language markets OMGOMG and Solaris seemed prepared to take major percentages of its former user base, but internal squabbles and lengthy DDOS attacks against each other drove them out of the game. The allegiances of newer Russian-language markets remain divided between old groups within the Hydra administration, having lost the spirit of unity that led to the market’s original triumphs.
Instead, a former dark horse in the race known as Mega has emerged as the replacement market. Mega’s operators are adept in the art of keeping a darknet market afloat without garnering too much unfavorable notice from any prospective enemy, having been operating in one form or another since 2016. Mega employs the same vendor shop format that Hydra pioneered, but it offers numerous improvements over the previous market, such as support for the privacy coin Monero (XMR), a cleaner and more intuitive browsing experience, and more advanced order purchasing options.
Mega darknet market homepage screenshot
Mega has developed remarkably quickly in the months following Hydra’s demise, boasting close to 20,000 listings given by over 6,400 shops as a result of its ability to survive rival attacks and display a level of professionalism characteristic of sound business practice. Though these figures pale in contrast to Hydra, Mega appears to be the preferred market among ex-Hydra sellers and customers, at least for the time being. It is unclear whether Mega is in the running to become Russia’s new darknet market of choice in the long run, but for the time being, they appear to be set on carrying Hydra’s old mantle.