Darknet Markets Sold Over $790 Million Worth of Cryptocurrency Last Year: Chainalysis

Research conducted by blockchain analytics firm Chainalysis shows that darknet markets sold over $790 million worth of cryptocurrency last year, making it the first year sales surpassed $600 million.

According to the firm’s new Crypto Crime Report, for the first time since 2015 darknet markets increased their share of incoming cryptocurrency transactions, going from 0.04% in 2018 to 0.08% in 2019. While the figures still show darknet market transactions make up a fraction of total cryptocurrency transactions, the market is seemingly growing.

Chainalysis’ report found that the “vast majority” of darknet market transactions flow through cryptocurrency exchanges. These trading platforms are the most common service used to both send funds to vendors, and for vendors to cash out cryptocurrency obtained from sales.

The blockchain analytics firm noted that while these markets’ share of incoming cryptocurrency activity remains “extremely low” the volumes show how resilient they are, as they’ve been facing heightened law enforcement scrutiny. A total of eight darknet markets shut down in 2019, but eight new ones opened up.

When law enforcement shuts down one market, another one moves to satisfy customer demand. Per the report, business was better for darknet markets in 2019:

On average, each active market in 2019 collected more revenue than those active in any other year, apart from during the height of Silk Road’s heyday in 2012 and 2013.

As CryptoGlobe reported, darknet market vendors have even been offering Black Friday deals to their customers, which could’ve helped contribute to the revenue growth, which was fueled by more purchases rather than larger ones.

Chainalysis also points out that darknet market transaction activity doesn’t appear to be heavily influenced by price movements. While transactions to exchanges, gambling sites, and merchants surged in July, transactions to darknet markets only experienced a minor rise.

Similarly, transaction activity on darknet markets was within a much narrower range throughout the rest of the year.

market transactions 30-day averageSource: Chainalysis

The report also notes that markets focusing on drug sales are the most popular ones, although markets selling stolen credit card information are also relatively popular. One of these markets mentioned n the report is estimated to have taken in at least $22.7 million worth of BTC, BCH, and USDT.

Chainalysis expects darknet markets to start adopting privacy-centric cryptocurrencies in the future to make it harder for law enforcement to identify buyers and vendors. Right now, only one major darknet market appears to be accepting Monero (XMR) as a payment method.

Featured image via Pixabay.

Cannabis Shops Turn to Crypto Apps Amidst Coronavirus Cash Shortages

Michael LaVere
  • Cannabis shops in Boulder, Colorado are using bitcoin payment app Strike to conduct "contactless" exchanges.
  • Cash shortages and lack of sanitation are causing businesses to find alternative means for transaction. 

Cannabis shops are using bitcoin payment services to conduct business in place of fiat amidst the coronavirus pandemic. 

According to a report by CoinDesk, cannabis dispensaries in Boulder, Colorado have been onboarded to the closed beta for Strike, a bitcoin payment service application founded by lighting network supporter Zap. 

Zap, founded by Jack Mallers, has been operating a closed beta for the payment application Strike which allows users the option of sending bitcoin or dollars and receiving funds in their bank account. The application uses a simple QR code interface, similar to Venmo, that allows users to send funds without having prior knowledge or expertise with bitcoin. 

Mallers said, 

Every Strike user is given a public domain at strike.me. We’re using Lightning for really fast online settlement of value transfers. … It’s also beneficial for privacy on the sender’s side.

Johnny Kurish, general manager at Boulder’s Helping Hands Herbals cannabis shop, said the application allowed his dispensary to process $1,000 worth of purchases since being added to the beta last week. 

Kurish said the dispensary will switch to only accepting Strike payments, which allow for contactless exchanges in light of the coronavirus pandemic. 

He said, 

We’re really lucky to have curbside drop-offs. We check the ID through the roll-up window, deliver the cannabis to a podium in front of the car. We’re happy to reopen with an option that’s safe for our staff.

Featured Image Credit: Photo via Pixabay.com