November 27, 2020

Cryptheory

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In Q4 2019, $ 600 million bitcoins were spent on darknet

2 min read
In Q4 2019, $ 600 million bitcoins were spent on darknet
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A total of 11 cryptoexchange attacks occurred in 2019, resulting in theft of bitcoins worth nearly $ 2.8 billion. The stolen bitcoins have been moved to several major exchanges like Binance and Huobi. However, $ 600 million was sent to darknet.

 

Purchase on the darknet

 

The Chainanalysis portal revealed on its blog that the BTC price had a much smaller impact on consumer behavior and continued in a much narrower volume range over the past year. In their blog they wrote:

“Our most interesting finding is that the transaction activity on the darknet markets seems to be less influenced by outflows and flows of the cryptomarket.”

 

This means that Bitcoin users could buy stolen credit card information or a number of other illegal goods on darknet. According to the survey, these illegal transactions account for less than 1 percent of all cryptocurrency transactions.

Chainalysis also reported that total cryptocurrency sales rose to a record $ 790 million in 2019, exceeding $ 600 million for the first time ever.

 

Although the share of payments on Darknet remains relatively low, their year-on-year increase suggests that illegal transactions are still extremely resilient to regulator interventions despite their efforts to increase enforcement.

 

Darknet market

 

Drug markets still dominate, but they are not the only inventory offered. Markets specialized in other illicit goods also bring substantial funds. Markets focusing solely on selling stolen credit card information are expanding right behind the drugs.

The most popular illicit substance market is the Hydra Marketplace, which supplies drugs and other substances to customers in Russia. However, most orders come from the United States and Western Europe.

Although eight darknet markets closed in 2018, eight opened in 2019. On average, each active market accumulated more sales in 2019 than any other year.

The total number of active marketplaces receiving cryptocurrencies is currently 49.

The firm believes that by 2020, more and more darknet marketplaces will adopt privacy-oriented cryptocurrencies such as Monero (XMR).

 

Summary

 

Although Bitcoin is sometimes referred to as a currency for fraudulent activities, in fact the use of BTC for illegal activities is only 1%. The total share of incoming cryptocurrency transactions on darknet thus remains extremely low. They are more concerned with theft of BTC from the cryptoexchanges around the world.

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