A record $1.7 billion worth of cryptocurrencies were traded on the dark web in 2020

Darknet markets collectively generated a record $1.7 billion worth of cryptocurrency transactions during 2020, according to an excerpt from a forthcoming report published yesterday by crypto data firm Chainalysis.

The number of individual purchases from darknet marketplaces has declined in 2020, with revenues remaining mostly stable compared to 2019. However, one darknet platform stood out as accounting for 75% of transactions – Hydra.

Hydra​

Researchers found that Hydra not only accounted for 75% of global darknet market revenue in 2020, but it is also unique in that it only serves Russian-speaking countries. At the same time, it is currently the largest platform of its kind in the world.

“Hydra is a significant driver of Eastern Europe’s unique crypto crime landscape. Eastern Europe has one of the highest volumes of cryptocurrency transactions associated with criminal activity, and thanks to Hydra, it is one of the top 10 entities sending crypto value to the region, the only region that provides criminal services.”

Hydra accounts for 75% of global darknet market revenue

And the platform may eventually expand to English-speaking countries as well. To this end, Hydra even announced plans to raise $146 million through an initial coin offering (ICO), which will be used to create Eternos, a global darknet market that will not be limited to Eastern Europe. However, Chainalysis asserts that criminals are also facing the pain of the coronavirus pandemic, which has delayed the plan.

But when Hydra eventually expands its operations to the United States and Europe, it could create a host of new headaches for local law enforcement agencies due to the platform’s “Uber Eats-like” system of assigning criminal deliveries to anonymous couriers.

“[Couriers] drop their packages off at remote, hidden public locations, often called ‘drop stations’, and then share them with buyers. This eliminates the need for a physical exchange, and unlike traditional darknet markets, vendors don’t need to risk using the postal system.

Personal information scams are more popular than drugs

Aside from Hydra and other marketplaces serving specific regions, dark web activity was less prevalent in English-speaking countries in 2020. Notably, some of the largest platforms in this category are personal information scam marketplaces (rather than drug marketplaces), selling credit card information and other stolen personal data to scammers and hackers.

According to the report, almost all cryptocurrencies flowed from centralized and high-risk exchanges to darknet markets. It is worth noting that in the process, the share of standard crypto exchanges increased to 46% in 2020, indicating that the accelerated adoption of digital assets has inevitably led to an influx of new users into darknet markets.

Geographically speaking, users in Europe and North America were the most frequent customers of darknet markets in 2020.

“Eastern Europe also received the most value from darknet market vendors, although a large portion of this was driven by a large volume of transactions from Hydra, which was a major outlier market,” the researchers noted, along with Central Asia, South Asia and Oceania, East Asia, Latin America, and North America.

Overall, the United States, Russia, Ukraine, and China all lead in terms of value sent and received on darknet markets.