Dark Web Revenue Down Dramatically After Hydra’s Demise
In fact, this year’s decline in active markets follows a period of sustained growth in the number of active markets from 2018 through February 2020. In court documents, the Justice Department estimated that Hydra Market accounted for 80 percent of all cryptocurrency transactions on the dark net, generating $5.2 billion in sales since 2016. German and American officials said authorities seized cryptocurrency worth $25.3 million dollars when they shut the market down. Germany’s Federal Criminal Police Office (BKA) announced that the world’s largest illegal dark web marketplace, Hydra Darknet Market, has been taken down. The BKA confiscated 543 bitcoins with a total value of around 23 million euros.
This website contains links to third-party sites that are not under the control of Chainalysis, Inc. or its affiliates (collectively “Chainalysis”). Access to such information does not imply association with, endorsement of, approval of, or recommendation by Chainalysis of the site or its operators, and Chainalysis is not responsible for the products, services, or other content hosted therein. Services like Garantex make cryptocurrency-based crime profitable by giving cybercriminals a way to exchange illicitly obtained cryptocurrency for cash, and like Hydra, also represented a possible avenue for sanctions evasion by designated Russian entities. We commend OFAC for its designation of Garantex, and consequently preventing compliant cryptocurrency businesses from doing business with the exchange. Department of Treasury Office of Foreign Assets Control (OFAC) sanctioned Hydra in April and German agencies ordered its closure, average daily revenue for all dark web markets fell from $4.2 million to $447,000.
They cited security concerns as the reason, and to date they have not returned to trading. It is the most prominent Russian darknet market and the largest darknet market in the world. Hydra trades in Ransomware-as-a-Service, breach services and software, stolen personal information, counterfeit currency, stolen virtual currency and illicit drugs. Following a sale, Hydra’s vendors anonymously distributed illicit goods to physical locations. After Hydra received payment, typically in cryptocurrency, buyers would receive location coordinates. “With Hydra and the evolution of money-laundering services as a feature of the darknet market ecosystem, a number of new financial motivations come into play,” Jardine says.
Understanding the Current State of Darknet Markets
In recent months, many users have found themselves asking, why are all the darknet markets down? The decline in accessibility to these platforms has raised questions about the sustainability and future of such illicit online environments.
The Landscape of Darknet Markets
There are still many other dark net markets operating, and single-vendor sites, too, plus new app-based vending across Wickr, Telegram, Instagram and Facebook, as well as standard mobile-phone delivery services. The general volatility of darknet markets has led to calls for further decentralization of transactions to protect both buyers and vendors. If cryptocurrency is held in a customer account on a darknet platform, it’s always at risk if a site shuts down. Silk Road was a notorious cyber black market for illicit goods, and the first dark web market of the internet era. Launched in 2011 and shut down by the FBI in 2013, Silk Road paved the way for today’s underground world of dark web marketplaces. Then, get a cybersecurity tool with a built-in VPN to encrypt your connection and secure all your web activity.
- For example, the second version of AlphaBay is now online since August 2021 after the predecessor was shut down in 2017.
- The message ends with a notice to vendors on the platform, promising to post a link for them to perform transactions without time restrictions, allowing the retrieval of escrow balances.
- “Excluding Hydra, if all darknet markets take in $250 million per year and administrators make 5% commission, that’s $12.5 million total divided by all the markets, where a lot of employees have to be paid.
- “Other” contained mostly European countries (e.g., Italy, France, Poland, Portugal), it also contained a range of Asian countries (India, Thailand, Singapore, Cambodia), and others (e.g., Afghanistan, Chile).
They reiterated their point that Covid has caused ongoing darknet market delivery delays by placing more strain on postal services. “The world hasn’t gone back to normal yet, so it is unsurprising that the market hasn’t corrected itself yet. While some markets claim their closures are only temporary, the 37 darknet markets active in November 2020 is the lowest total since November 2017.
Darknet markets are hidden online platforms that facilitate the buying and selling of illegal goods and services. These markets rely on anonymity and decentralized technology, particularly cryptocurrencies, to maintain operations.
Reasons Behind the Downtime
Some commenters on the post have expressed support for the administrator’s decision and many vendors are already posting to say which markets they are moving to. The Dark Web is a collection of websites, forums, and marketplaces that are only accessible by using the Tor browser. This specialized browser grants users a level of anonymity that is especially appealing to cybercriminals, hackers, and government operatives who want to hide their identity.
The reasons for the current shutdowns can be attributed to several factors:
- Law Enforcement Initiatives: Authorities across the globe have ramped up efforts to tackle illegal activities online. Notable operations have resulted in the shutdown of major darknet markets.
- Scams and Fraud: Many users have fallen victim to scams, leading to a loss of trust in these platforms. Scammers take advantage of the unregulated nature of darknet transactions.
- Technical Issues: Sites may experience downtime due to maintenance, server issues, or attacks from hackers.
- Market Saturation: With numerous markets vying for users, some may simply fail to thrive and consequently shut down.
Impact of Shutdowns
The consequences of these closures extend beyond accessibility:
- Increased Risk of Counterfeit Products: As legitimate darknet marketplaces close, users may turn to less reliable platforms, leading to a rise in counterfeit goods.
- Rising Prices: Reduced competition can result in artificially inflated prices for goods that are still available.
- Fractured Communities: The closure of popular marketplaces can splinter user communities, making it harder for buyers and sellers to connect.
What Lies Ahead?
The future of darknet markets may center around adaptation and resilience. Some potential developments include:
- Emergence of New Markets: Just as older markets fade, new ones will continuously arise to fill the void.
- Increased Security Measures: Market operators may implement better security and trusted systems to combat fraud and bolster user confidence.
- Shifting User Preferences: Users may begin to prioritize markets that offer better safety and a reputation for reliability, regardless of their legality.
FAQs About Darknet Markets
Why are all the darknet markets down right now?
Several factors contribute, including law enforcement crackdowns, increasing scams, technical issues, and market saturation.
Will darknet markets come back?
While some markets may remain down, new ones are likely to emerge as the demand persists.
What should users consider when looking for darknet markets?
Users should prioritize security, community reputation, and the range of goods and services offered when seeking out alternatives.
Are darknet markets inherently unsafe?
While some markets have established a level of trust, the nature of these platforms means significant risks related to scams, law enforcement, and counterfeit products.
Understanding the complexities surrounding why are all the darknet markets down is crucial for those interested in navigating this hidden online world. The future remains uncertain, but the quest for anonymity and goods will likely lead to the evolution of these markets.
