Activity in darknet markets went up in 2020, despite fewer purchases: Report

In 2020, darknet markets brought in a total of $1.7 billion worth of cryptocurrency, as stated by a Chainalysis Crypto Crime Report. While individual purchases from darknet markets fell from 12.2 million in 2019 to less than 10 million in 2020, one specific market called Hydra, which served Russian-speaking countries, contributed to nearly all of the growth in darknet market activity for 2020. Hydra accounted for over 75% of worldwide darknet market revenue in 2020. 

To be noted, some of the largest markets with darknet activities were fraud shops, selling stolen credit card information and other data, including personally identifying information (PII), internet protocol SOCKS5, stolen accounts for different services, and hacking exploits rather than drugs. Standard exchanges, peer-to-peer (P2P) exchanges, high-risk exchanges, and other darknet markets accounted for nearly all of the cryptocurrency sent to darknet markets. In 2020, the share of standard exchanges for darknet market revenue was 45%, compared to 31% in 2019. Cryptocurrency mixers saw a significant rise in the amount received, their share doubling from 4.8% in 2019 to 13.7% in 2020.

Interestingly, the report shows that the darknet markets received over $16.5 million on net from cryptocurrency ATMs, which suggested darknet market customers funding their buying activity in fiat by depositing it at cryptocurrency ATMs. Easter Europe, Northern and Western Europe, and North America had the biggest darknet market customers.

While 2020’s darknet market revenue surpassed that of 2019, the overall number of purchases and customers fell, though the purchases for higher values persisted. Total transfer of darknet markets stood under 10 million for 2020, compared to the total of over 12 million for 2019. 2020 saw darknet market closures for markets such as Flugsvamp 2.0 and Empire, the report stated. 

As per the Chainalysis report, 37 darknet markets remained active in December, 2020. Other active markets fell victim to denial-of-service (DoS) attacks from other markets. In the case of Empire market, its operators exit scammed in 2020, two days after being hit by a DoS attack.

(With insights from the Chainalysis Crypto Crime Report, 2021)

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