How Much Value is on the Darknet Markets?

Exploit kits are automated attack tools that first compromise websites, and then exploit vulnerable browsers of site visitors in order to spread malware or carry out other attacks. In successful cases, law enforcement can combine this intelligence with other investigative techniques to seize the online infrastructure and residual virtual currency, like in the case of the Silk Road seizure. In 2023 the dark web has over 2.5 million daily visitors, and it’s estimated that more than half of those visitors have participated in illegal activities.

The darknet markets, also known as the “dark web,” are a part of the internet that is intentionally hidden and is inaccessible through standard web browsers. These markets are often used for illegal activities, such as the sale of drugs, weapons, and stolen data. But just how much value is on the darknet markets?

New Cybercrime Business Opportunity

Estimating the Size of the Darknet Markets

Funds linked to sanctioned entities account for over half of the illicit volume processed by parasite exchanges. This is partly because nearly two-thirds of parasite exchanges appear to be based in Russia and Iran, with the Iranian exchanges being sanctioned based on their jurisdiction. SUEX, a crypto exchange and OTC broker sanctioned by OFAC in 2021, operated as a parasite exchange and was complicit in laundering millions of dollars for Russian ransomware groups.

Darknet Markets: The Dark Web’s Thriving Black Markets Revealed

It is difficult to estimate the exact size of the darknet markets, as they are constantly changing and evolving. However, several studies have attempted to quantify the value of these markets. One study, conducted by Digital Shadows, a cybersecurity firm, estimated that the total value of goods and services sold on the darknet markets was around $300 million in 2017. Another study, conducted by Carnegie Mellon University, estimated that the total value of goods and services sold on the darknet markets was around $1 billion in 2015.

• It appears that the service was motivated to retire after suffering a major distributed denial-of-service (DDoS) attack, with its web server knocked offline by intentional floods of traffic.
• According to CipherTrace research, there has been at least one notable darknet market launched every month on average since early 2019.
• The short, scary answer is that some of your personal data is almost certainly already for sale on the dark web.
• Much of the decline was attributed by researchers at blockchain analysis firm Chainalysis to the shutdown of Hydra Market, which was taken down by law enforcement agencies in Germany and the U.S. in April 2022.

The Most Popular Goods and Services

It is likely that this number will only grow in the future, however, the use of blockchain analytics such as CipherTrace can ensure that the funds originating from any of these dark markets are identified the moment they are moved to fiat off-ramps such as exchanges. As it stands, DarkMarket and White House Market appear to be the largest darknet markets in the Western world with over 300,000 customer accounts each. White House Market saw a 40% increase in users between August 27 and September 28, following the exit scam of Icarus, and a further 8-10% increase between late September and October 20. The next most notable darknet markets currently active are Versus Market, Monopoly Market, ToRReZ Market, and of course the Russian darknet behemoth—Hydra—which has been active since 2015 and is likely the largest darknet market in the world. CipherTrace researchers are currently monitoring over 35 active darknet markets.

Treasury Payments

The most popular goods and services sold on the darknet markets are drugs, with the sale of illegal drugs accounting for the majority of the value on these markets. Other popular goods and services include weapons, stolen data, and hacking tools. According to the Digital Shadows study, the top three categories of goods and services sold on the darknet markets in 2017 were drugs, digital goods, and services. The top three categories of drugs sold on the darknet markets in 2017 were cannabis, opioids, and stimulants.

The gambling process involves customers paying money into a casino or bookmakers’ and later cashing out any winnings along with the remaining funds and an official receipt. This gives money launderers the opportunity to claim that their illicitly-obtained funds are merely gambling profits. The below example shows a drug vendor cashing out their profits from the DNM (represented by the red nodes) and sending the funds to addresses controlled by them at two separate exchanges. In the example below, in August 2022 a money laundering group deposited illicitly-obtained cash from into several crypto ATMs. From there, the funds, now in bitcoin, were sent to a consolidation wallet before being deposited at a large exchange.

Crypto, Cash-outs, And Closures: Surveying The Darknet Ecosystem In The Wake Of Hydra Market

The Impact of Law Enforcement

While DeFi has the potential to increase financial inclusivity and provide more accessible and transparent services, it can also be exploited by those seeking to engage in illicit activities. Cryptocurrency-based gambling platforms make it difficult to trace funds through the service. This means that casinos must perform KYC and source of wealth checks on customers seeking to deposit large amounts. Later, should a suspected criminal claim gambling winnings as the source of their funds, the online casino in question can be subpoenaed by local law enforcement to release records relating to that user.

Law enforcement agencies have been increasingly active in trying to shut down darknet markets and arrest those involved in illegal activities on these markets. In 2017, the FBI, in coordination with Europol, shut down the largest darknet market, AlphaBay, which had an estimated 200,000 users and 40,000 vendors. The shutdown of AlphaBay and other darknet markets has had a significant impact on the value of goods and services sold on these markets. However, new markets continue to emerge, and the value of goods and services sold on the darknet markets is likely to continue to grow.

Conclusion

The darknet markets are a part of the internet that is often used for illegal activities and it is difficult to estimate the exact size of these markets. However, several studies have attempted to quantify the value of goods and services sold on the darknet markets, with estimates ranging from $300 million to $1 billion. The most popular goods and services sold on these markets are drugs, with the sale of illegal drugs accounting for the majority of the value. Law enforcement agencies have been increasingly active in trying to shut down darknet markets, but new markets continue to emerge, and the value of goods and services sold on the darknet markets is likely to continue to grow.