Darknet Market Brings Billions In Crypto World, Finds Study

Darknet market has set a new revenue record in 2021 as it brought in a total of $2.1 billion in cryptocurrency, finds a recent research report by Chainalysis, a Singapore-based blockchain data platform. "Roughly $300 million of this total was generated by fraud shops, which brokered the sale of stolen logins, credit cards, exploit kits, and more," states the report.   

What Is Dark Web Market? 

The dark web or darknet has been defined as the hidden collective of internet sites only accessible by a specialized web browser. Kaspersky Lab, a Russian multinational cyber security and anti-virus provider mentioned in their report that dark web is used for keeping internet activity anonymous and private. 

According various research reports, darknet has been exploited for various illicit and illegal activities like drugs transfer, child crime etc. Due to the growing illegal activities using dark web, the FBI and Interpol seized four of its blockchain domains namley .bazar, .lib, .emc, and .coin, finds the report. Later, in June 2021, a multinational operation seized the infrastructure of Slil_PP, one of the largest fraud shops for stealing username-password combinations.  

"It’s a typical good vs evil manifestation of technology. Although, crypto enabled highly secured network and recently, organisation like Travel Rule Universal Solution Technology, or TRUST allow crypto firms to securely collect and transmit customer data in accordance with the travel rule," says Dileep Seinberg, Founder & CEO, Thinkchain, a crypto, NFT & Blockchain advisory company. 

Earlier in October 2021, the Department of Justice announced the results of Dark HunTor, an operation that resulted in the arrest of 150 drug traffickers and the closure of two drug markets.  

Darknet Market And Crypto 

The Chainalysis report pointed out that threats, alongside other barriers to entry like finding a hosting provider and retaining vendors, have made opening and operating in darknet market too difficult for many would-be administrators—another explanation for the decline. 

 According to the report, Hydra, a market that serves only Russian-speaking countries, is the largest darknet market operating via crypto so far. In 2021, Hydra accounted for 80 per cent of darknet market revenue worldwide, in terms of cryptocurrency. 

The five largest markets in the crypto sector, other than Hydra this year, were, in descending order of revenue: UniCC, FEshop, Flugsvamp Market, Bypass Shop, and DarkMarket. Of these five markets, three were fraud shops (UniCC, FEshop, Bypass shop), two were drug markets (Flugsvamp Market, DarkMarket), and two were taken down by law enforcement (UniCC and DarkMarket). All of these markets serve customers worldwide, with the exception of Flugsvamp, which serves only Swedish users. 

 "We suspect that many of these buyer-vendor relationships were initially established on darknet markets, but that after a series of successful purchases, the buyers and vendors then arranged to transact off-market going forward," said Chanalysis report. 

Direct buyer-to-vendor sales reached $112 million this year, equivalent to approximately 5 per cent of total darknet market revenues, the report added.