More than 40 alleged dark-web drug dealers have been arrested as part of a sweeping federal effort described by the Department of Justice as “the first nationwide undercover operation targeting dark net vendors.” The core of the operation was an online money-laundering business seized by agents from Homeland Security Investigations and operated as a sting for over a year. By offering cash for bitcoin, HSI agents were able to identify specific drug dealers, ultimately tracing more than $20 million in drug-linked cryptocurrency transactions.

“For the past year, undercover agents have been providing money-laundering services to these dark net vendors, specifically those involved in narcotics trafficking,” said HSI Special Agent in Charge Angel Melendez, in a press conference earlier today. Melendez led the operation from New York.

The hijacked money-laundering service was offered across a number of different marketplaces, with agents claiming at least some presence on AlphaBay, Dream Market, Wall Street, and others. In the past, law enforcement efforts have focused on taking down marketplaces in full, most notably Silk Road, Silk Road 2.0, and AlphaBay.

But Melendez says his office has shifted focus to the individual dealers, who often operate independent of any single site. “When we take down a dark net marketplace, these criminals will move to other marketplaces,” Melendez said.

“So the focus of this operation was really the bad actors, the people utilizing the dark net to sell drugs.” So far, prosecutions have been launched across 19 states as a result of the operation, seizing more than $3.6 million in cash. The same raids seized large quantities of Schedule IV pharmaceuticals — including 100,000 tramadol pills and over 24 kilograms of Xanax — as is typical of trade on dark net markets. Read more from theverge.com…

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