The sixth-largest crypto service in Eastern Europe, Hydra, is becoming more popular than Krakern, OKEx and Poloniex.
According to a year-long study from Chainalysis, a cryptocurrency-fueled black market is one of the most extensive crypto services in Europe.
In their 2020 Geography of Cryptocurrency Report, an excerpt from it was published recently, Chainalysis has found that the darknet market Hydra is the sixth of the largest crypto service by volume in the region; it comprises Russia, Ukraine and other countries.
Darknet markets are the online black markets where one can buy and sell drugs, fake passports and other illicit merchandise and services in exchange for cryptocurrency. “No other region has a darknet market or other illicit service in its top ten services,” Chainalysis’s research team stated in the report.
Factually, Chainalysis has found that Eastern Europe is the world’s hub for darknet market activity, with 21% of its darknet market activity zigzagging up in the region. The region sent $41 billion to illegal entities or 1.4% of its total transaction volume.
The Chainalysis’s significant findings are that the blockchain analysis software is one of the few capable who works out how cryptocurrency moves around the world. This technology has helped Chainalysis identify the darknet marketplace and then track funds that flow in and out of the wallets controlled by those services.
“As a result of that, we can see where is all the money going to when it leaves darknet marketplaces,” stated the Chainalysis’s head of research, Kim Grauer.
It was found that when cryptocurrency leaves the darknet marketplaces, “by and large, the most common type of service that the funds wind up on are these predominantly Eastern European-based services.” (Other, more obvious clues, like Russian-language advertisements, helped point Chainalysis in the right direction, said Grauer).
Additionally, Chainalysis found that Eastern Europe is the world leader when it comes to ransomware, conferring to the study, it took place between July 2019 and June 2020. Above 23% of funds that victims send to ransomware, addresses can be traced to the region. (This is probably because Russian schools push high-schoolers to learn how to code, Chainalysis hazards)
Also, Chainalysis found that Ukraine and Russia are the world leaders in crypto adoption.
The Global Adoption Index that accounts for a country’s size and wealth shows that the governments use cryptocurrency, which is still considered purely speculative. In the past year, Chainalysis estimates that Russia has sent over $16.8 billion in cryptocurrency and received $16.6 billion; Ukraine has sent $8.2 billion and received $8 billion.
A contributing factor may be because of extensive mistrust with the Russian banking system, said Chainalysis. “What we have heard is that cryptocurrency is cheaper, more affordable, and pretty ubiquitous in Ukraine and Russia, especially when it comes to cross border payments, and just gaining access in the censorship-resistant kind of way,” said Grauer.
As it zooms throughout Eastern Europe, Grauer said that the report showed that ;