Revenues generated by underground marketplaces experienced a double-digit decline in 2022, thanks to the closure of the popular Hydra Market in April, according to Chainalysis.
The blockchain analysis company said that dark web revenues fell from $3.1bn in 2021 to just $1.5bn last year, while average daily revenue for all markets dropped from $4.2m just prior to Hydra’s closure to only $447,000 immediately after.
Although the collective revenues of drugs markets didn’t recover fully, they slowly crawled back up to reach previous levels thanks to the success of Mega Darknet Market, Blacksprut Market and OMG!OMG! Market in the wake of the Hydra takedown.
Criminals migrated to these primarily drug markets in ever greater number after they also began offering money laundering services, as Hydra did, Chainalysis said. Some, like OMG, also offer hacking utilities and stolen banking information.
In fact, Chainalysis said OMG has several overlaps with Hydra that may suggest its admins are involved in the project. These include the same “dead drop” exchange options for vendors and buyers, and shared cryptocurrency deposit addresses.
“OMG’s central wallets send high volumes of cryptocurrency to the same group of deposit addresses at a high-risk exchange with a heavy presence in Russia,” the report claimed.
“The overlap in deposit address usage suggests that those deposit addresses may be controlled by the same individuals, which would suggest further vendor overlap or possibly even administrator overlap.”
Single vendor shops have also emerged as an alternative to large marketplaces, allowing vendors to save on the fees that would otherwise go to the admins of markets like Hydra.
However, fraud shops also saw continued decline during 2022.
“Fraud shops are a unique segment of darknet markets that sell compromised data such as stolen credit card information and other forms of personally identifying information (PII) that can be used for fraudulent activity,” Chainalysis explained.
“This decline was triggered in part by the closure of prominent fraud shops like Bypass Shop, which was shut down in March. Brian Dumps, the biggest overall fraud shop for the year, also appears to have suffered a disruption as its revenue fell almost to zero in October, though it’s unclear exactly why.”