Darknet Markets Generated $1.7 Billion in Crypto Revenue in 2020

Darknet market revenues hit a new all-time high in 2020, despite declining individual purchases from marketplaces. Blockchain analytics firm Chainalysis also spotted a singular driver behind the new record witnessed over the last year.

Hydra Market Is the Major Driver Behind Revenue Figures in 2020

According to the Chainalysis 2021 Crypto Crime Report, darknet markets brought in a total of $1.7 billion worth of cryptocurrencies in 2020. But the report unveiled that Hydra Market, one of the largest illegal marketplaces in the darknet, boosted the total revenue significantly.

In fact, Chainalysis details that without Hydra’s figures, darknet market revenue should have stayed “roughly flat” from 2019 to 2020. As a particular fact, Hydra Market is a one-of-its-kind darknet marketplace, as it only serves Russian-speaking countries.

The research revealed that Hydra could be considered the largest darknet market globally, accounting for over 75% of the 2020 revenue. According to the analytics firm, such marketplace is a big driver of Eastern Europe’s unique crypto crime landscape.

That’s why the region has one of the highest rates of crypto transaction volume associated with illegal activities, says Chainalysis. Authorities have raised concerns about the “uniquely sophisticated operations” that Hydra Market is running, such as offering anonymous couriers to deliver packages.

Geographical Overview of the Research

Per a crypto forensic analysis made by Chainalysis, Europe (Western, Northern, and Southern) and North America are the biggest darknet market consumers.

Most of the cryptos are laundered by the criminals via over-the-counter (OTC) exchanges in China or Eastern Europe, says the research. They also added:

The United States, Russia, Ukraine, and China dominate in terms of value both sent to and received from darknet markets. Venezuela and Vietnam also rank high on both sides, with their activity skewed slightly more toward darknet market buying, which could be related to the drug manufacturing activity prominent in both countries.

Chainalysis also shared some findings on China and Russia’s darknet transaction volume:

We also suspect that a good deal of China and Russia’s volume received by darknet markets represents funds flowing to money laundering services concentrated in those countries, though it’s possible similar services are operating in other countries receiving large volumes of funds from darknet markets.

What do you think about the research’s findings? Let us know in the comments section below.