Darknet Market Crypto Crime Revenue Spikes to $1.7 Billion: Report
Crypto related crime continues to evolve based on the environment. Darknet marketplaces and sanctions evasion are seeing increases even as overall volumes declined last year, according to blockchain analysis firm Chainalysis.
Key Trends:
- Darknet markets rebounded to over $1.7 billion after the previous Hydra shut down.
- Smaller, specialized sites are thriving; yet to regain peak revenue levels.
- Sanctions drive a spike in money laundering crypto volume, now 61.5% of illicit transactions.
- Scams down but diversifying; romance frauds doubled revenue; hit victims hardest.
In its annual crypto crime report released Thursday, Chainalysis said darknet market revenue jumped last year after the previous dominant player, Hydra, was dismantled. Though no single site has replaced it, more niche-based operations are competing for share.
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Mega Darknet Market now leads with over $500 billion in cryptocurrency inflow. However, the category has yet to return to peak revenue totals seen during Hydra’s reign. Authorities continue targeting such platforms that help in trafficking illegal goods and services.
Crypto money laundering volume grew dramatically
Money laundering volume also grew dramatically as crypto-related sanctions from the U.S. Office of Foreign Assets Control more than doubled to 18 designations.
Sanctioned entities and jurisdictions accounted for 61.5% of all illicit crypto transaction value in 2023, totaling nearly $14.9 billion.
The report shows evolution in crypto scams as well, even as volumes decreased year-over-year. Emerging pig butchering cons that prey on romantic interests saw an 85-fold revenue increase since 2020.
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Scammers adapt techniques for greater success, with romance frauds and phishing efforts considered most damaging to victims.
Experts say collaboration across law enforcement and vigilance by individuals represent the best prevention for such schemes. However, the report confirms that crypto crime continues to evolve to exploit vulnerabilities during periods of growth.
Ongoing cyber threats combined with sanctions evasion indicate more monitoring and security controls remain necessary for cryptocurrency’s further integration into the mainstream.
