Dark net drug markets and fraud shops pulled in $1.3 billion in 2022, half as much as a year earlier, after law enforcement shut a major Russian-speaking market, according to Chainalysis Inc.
(Bloomberg) — Dark net drug markets and fraud shops pulled in $1.3 billion in 2022, half as much as a year earlier, after law enforcement shut a major Russian-speaking market, according to Chainalysis Inc.
Police action in April against Hydra, a Russian-speaking market used to facilitate drug trafficking and money laundering, prompted a decline in average daily revenue for all such markets to $447,000 from $4.2 million before the closing, according to findings published Thursday by Chainalysis, a New York-based firm that tracks blockchain transactions to illicit cryptocurrency accounts.
The so-called dark net is a broad term used to describe the various websites and forums where web users sell narcotics, hacking tools and other illegal wares. Such sites transact almost exclusively in cryptocurrency and are accessible with anonymity software that cloaks a user’s location. Four of the five busiest dark net markets in 2022 were dedicated to drug sales, according to Chainalysis.
“While drug markets’ collective revenue hasn’t recovered fully, it climbed slowly back toward previous levels in the second half of 2022,” researchers wrote of recent activity.
According to the US Justice Department, Hydra accounted for 80% of dark net cryptocurrency transactions before it was seized in an operation conducted with German authorities.
Darknet markets, which are typically run on the Tor Network, are notoriously persistent. After major takedowns by law enforcement over the years, buyers and sellers typically migrate to new sites and continue business as usual.
Following the end of Hydra, users migrated to a new market dubbed OMG!OMG!. Chainalysis speculates that the administrators of OMG!OMG! may have some connection to Hydra.
“We don’t have definitive evidence confirming that any of OMG’s creators or administrators were formally associated with Hydra,” Chainalysis said. “However, the deposit address overlap and instantaneous mass migration of Hydra users to OMG following Hydra’s shutdown suggests that it’s certainly possible.”
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