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How Much did Darknet Markets Earn in 2020?

A report from Chainalysis documents the rise of darknet market Hydra over the previous year.

In 2020, darknet markets raked in a record of $1.7 billion worth of cryptocurrencies in total – however, one single platform has been responsible for 75% of that figure, according to an extract of an upcoming report that was published by Chainalysis yesterday.

The number of individual purchases from the darknet markets declined in 2020, and their revenue remained flat compared to 2019. But one of the platforms stood out – a darknet market named Hydra.

Hydra enters the game.

Hydra was responsible for 75% of global darknet markets revenue in 2020, but it is a bit unique that it only serves Russian-speaking countries, the researchers unearthed. At the same time, it is currently the biggest platform of its kind in the world.

“Hydra is a big driver of Eastern Europe’s unique crypto crime landscape. Eastern Europe has one of the highest rates of cryptocurrency transaction volume associated with criminal activity and, thanks to Hydra, is the only region with a criminal service as one of the top ten entities sending cryptocurrency value to the region,” the researchers elaborated.

And then, the platform may ultimately expand into English-speaking countries as well. By the end of this, Hydra even announced that it aims to raise $146 million through an initial coin offering (ICO), which will create Eternos, a global darknet market not limited to Eastern Europe. But it looks like criminal enterprises, and it also suffers in the face of the coronavirus pandemic because it delayed the plan, Chainalysis explained.

But when Hydra eventually expands its heads into the US and Europe, it could create many new headaches for local law enforcement agencies because of the platform’s “Uber-like” system for assigning drug deliveries to anonymous couriers.

“[The couriers] drop off their packages in out-of-the-way, hidden public locations, commonly referred to as ‘drops,’ which are then shared with the buyers. That way, no physical exchange is made, and unlike with traditional darknet markets, vendors don’t need to risk using the postal system,” the researchers explained.

Fraud is more popular compared to drugs.

Aside from Hydra and other markets that serve specific regions, darknet activity had been less prevalent in English-speaking countries in 2020. Remarkably, some of this kind’s most prominent platforms are fraud shops that sell credit card information and other stolen personal data to scammers and hackers.

According to the report, almost all cryptocurrencies flow into darknet markets from centralized, peer-to-peer, and high-risk exchanges.

Remarkably, the share of standard crypto exchanges in this process had increased to 46% in 2020, indicating that accelerated adoption of digital assets has led to the influx of newbie customers on darknet markets. Geographically, users from Europe and North America were the most frequent customers of darknet markets in 2020.

Eastern Europe also receives by far the most value from darknet market vendor addresses, though much of this is due to massive volumes from Hydra, which is a major outlier market,” the researchers noted, continuing, “Northern & Western Europe receives substantial amounts as well, as does Central & Southern Asia and Oceania, East Asia, Latin America, and North America.”

In total, the US, Russia, Ukraine, and China were leading when it comes to value both sent and received from darknet markets.

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