- AlphaBay, the former darknet marketplace, listed Monero in 2016, causing the price to rocket
- AlphaBay insiders were accused of price manipulation, a suggestion that was backed up by evidence in the indictment against founder Alexandre Cazes
- Monero still occupies the title of the privacy coin of choice for darknet markets
AlpahBay was the biggest darknet marketplace until it was taken down by U.S. authorities in 2016. What isn’t widely known is that the darknet emporium was largely responsible for the rise of Monero as the choice coin of the crypto underworld, dragging it from obscurity to become the only competitor to Bitcoin for those looking to conduct shady transactions. Oh, and they were the first to pump and dump it.
AlphaBay Picks, and Pumps, Monero
AlphaBay launched around December 2014, initially only accepting Bitcoin. This remained the case until mid-2016 when a relatively obscure coin called Monero was adopted by Oasis Market, an AlphaBay rival. At this point, one XMR token was trading for about $2.45, with the market cap being some $30 million.
Just a day after Oasis Market’s announcement, AlphaBay joined the Monero party, announcing on August 22 their intention to implement the token. The price of an XMR token ballooned immediately, with the market cap rocketing to almost $110 million by the time integration was complete a week later:
This represented a more than three times increase, solely driven by AlphaBay’s integration, with over $61 million in XMR trading conducted in just 24 hours at one point during the integration week.
Monero Price Manipulation?
There were suspicions at the time that AlphaBay employees were buying up Monero in advance of a listing announcement, something that was alluded to by AlphaBay forum members:
already very late. you should have bought the same day AB announcement was made. there is NO excuse not to buy 5 figures worth of any crypto that AB announces it will accept.
The same message later states that “AB is nothing short of insider and price manipulation.”
Evidence of this manipulation can be found in the indictment sheet for AlphaBay founder Alexandre Cazes. When Cazes’ laptop was seized, wallets for Bitcoin (1,605), Ethereum (8,309), and Zcash (3,691) were discovered alongside unknown Monero holdings.
Given that AlphaBay had been accepting Bitcoin since day one it is no surprise to see Casez holding such a large amount, but Ethereum support was only added in May 2017 so it is something of a stretch to think he amassed that amount through sales in the one month it was live for before his arrest.
The case against AlphaBay and Cazes gets worse when you consider his Zcash holding. The coin was never officially supported before its shutdown but was a coin that the operators considered “a good alternative” in December 2016. It seems quite likely then that AlphaBay was planning a similar trick with Zcash, accumulating quietly before a listing pump into which coin holders including Cazes could sell their holdings at a healthy profit. Whoever said there was honor among thieves?
Monero Legacy Remains Intact
AlphaBay might have been bad for a number of reasons, and the continuing number of people who are facing prison because of their association with it, but it left the crypto world with a legacy.
Having spent two years virtually flatlining before August 2016, since the day AlphaBay announced their acceptance of Monero, when it was valued at $2.45, it has never traded below that price, reaching $483 in January 2018. In many ways Monero has never looked back from its AlphaBay pump, and it is safe to say that AlphaBay plucked Monero from obscurity and put it on a pedestal that it still occupies today.