Now that Hydra is gone, the crypto-based Dark Net Drug Trade is still trying to make a comeback
Fraudsters and illegal digital dealers made much less money last year than they did in 2021, although 2022 was still a record year for total stolen crypto hacks.
A new Thursday report by blockchain analytics firm Chainalysis says year-over-year revenue from dark net marketplaces was cut in half. In 2021, these malicious actors and international drug traffickers made $3.1 billion in crypto through these dark web sources, but in 2022, they only made about $1.5 billion. Of that, $1.3 billion came from drug trafficking.
Last April, German police announced that they had worked with the US Department of Justice, including the FBI and the Drug Enforcement Agency, to take down the dark online marketplace Hydra. The Russian-language one-stop shop for illegal drugs and hacking tools was by far the largest source of illegal drugs online. It had been around since 2015, and has since been linked to others allegedly illegal crypto projects. At its height, it had a 93% stranglehold on all value from the dark web ecosystem. Police said the dark web service was responsible for $1.3 billion in drug sales in 2020 alone.
For those still unaware, the dark web is a unique overlay network that exists on the internet accessible using Tor. It is not visible to search engines, and for yearshas been a place for anonymized websites as well as illegal marketplaces. Since the infamous dark web drug market Silk Road came on the scene, virtually all of these illegal transactions are now handled with crypto.
Chainalysis’ report noted that Hydra Marketplace had remained the top-grossing marketplace in 2022, despite its early demise. Despite the defunct website’s nod to the mythical Greek beast, that if you cut off one head, two grow in its place, no other drug marketplace beats Hydra’s four-month revenue lead all year.
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The next three money makers were Mega Darknet Market, Blacksprut Market and OMG!OMG! Market. All tried to attract old Hydra customers, and all gained some of the long-held market share, according to data from the chain cited by Chainalysis. These marketplaces all started offering crypto-laundering services through so-called crypto mixers. But the gains were simply not enough to make up for the massive drop in revenue overall. Average daily revenue for these digital drug marketplaces dropped from $4.2 million to $447,000 in the immediate aftermath of Hydra’s collapse. Since then, OMG! suffered a DDOS attack and Blacksprut was hacked. Mega has since taken the lead for the most dominant darknet market.
Since then, revenues have risen fairly steadily since last April. On the flip side of things, dark net scam shops, which sell users personal information and credit card information obtained from hacks, have been on a steady decline until the end of 2023. In particular, the scam shop known as Brian Dumps has seen a decline in revenue. to zero at the end of last year. That leaves Unicc and Benumb Shop as the last two scam shops to make a real dent in the illegal market for personal data.
Previous analysis showed that illegal crypto activity reached all-time highs in 2022, despite the loss of these dark web stores. Part of this was due to some units being put on lists of sanctioned units. Still, close to $3.8 billion worth of crypto was stolen through hacks in 2022, with major peaks in March and October. As of last year, DeFi projects were the most targeted crypto entities by hackers, accounting for over 82% of all hacks last year.
