Posted 1 year ago | by Ben Armstrong

Crypto Payments on Darknet Markets Doubled in 2019 – Chainalysis

According to a new study, which was a part of 2020 Crypto Crime Report published last week, darknet markets have significantly increased their share of total incoming crypto transactions in 2019. The report was prepared by New York-based blockchain analytics firm Chainalysis, and it found that darknet crypto transactions doubled from 0.04% in 2018 to 0.08% in 2019.

Chainalysis says that 2019 was first time darknet crypto sales surpassed $600 million USD on an annual basis. The overall total grew 70% in 2019, and it accounts for more than $790 million worth of cryptocurrency in turnover.

The research company believes the recent growth of volumes indicates the resilience of the darknet markets to increased legal scrutiny from global regulators. The total share of crypto payments on the darknet remained low compared to other forms of payment, and the total number of active darknet markets remained stable in recent years.

Harder to Track Sales on the Darknet

As Chainalysis found, the implementation of new technologies is the increasing the share of cryptocurrencies coming to darknet markets, making the payment process more decentralized.

To avoid shutdowns by law enforcement, some darknet markets are adopting new infrastructures that have a fully decentralized structure, which is similar to the Tor web browser or “to the blockchain itself,” Chainalysis noted.

In January 2019, the company found that the value of Bitcoin sent to darknet markets had increased by 70% in 2018. Chainalysis also expects to see more darknet markets accepting or even requiring the usage of privacy-oriented cryptocurrencies like Monero (XMR).

Still Getting Busted

New arrests reports keep coming while global regulators and enforcement authorities are doing their best to shut down darknet markets, regardless of how the payments are being made. A citizen of the United States was charged with illegal narcotics distribution in exchange for Bitcoin at early of January 2020.

The largest darknet marketplace in Russia announced plans to raise $146 million in a token offering that would allow it to go global in late 2019. Hydra, an illegal marketplace for illicit substances, announced the token sale is in no way legal in terms of global securities laws.

No matter how badly the global authorities would like to remove anonymity from the online marketplace, it seems like there is no way to do so. The only real way to ensure that laws are followed is to write laws that are more in-line with the reality of life, and not push ideas on society that clearly aren't popular.