Bitcoin exchanges on and to the dark web are soaring

Credit: Eivind Pedersen – Pixabay

A study by Crystal Blockchain Analytics on cryptocurrency transfers made on the dark web finds a surge in transactions in Bitcoin since 2017 (+ 340%). This increase can however be explained by the popularity of this cryptocurrency.

Although the use of cryptocurrencies has become more widespread, these means of payment nevertheless sometimes continue to be associated with illegal activities on the Internet. A Crystal Blockchain Analytics report notes the popularity of Bitcoin on the dark web.

The balance sheet should however be qualified. Thus, the number of bitcoins transferred between darknet entities and others declined over one year in the first quarter of 2020. In fact, the total amount received by these sites decreased from 64,000 to 47,000 BTC.

$ 411 million in Bitcoin transited through the darknet

Likewise, the total number of bitcoins sent by these sites melted from 64,000 to 50,000 BTC in the first quarter of 2020. On the other hand, the value of the bitcoins thus transferred increased by 65% ​​during the same period.

In dollars, the actors of the dark web thus received and transferred a much higher total amount over one year. This loot grew from $ 384 million in the first quarter of 2019 to $ 411 million in 2020.

However, the value of Bitcoin has increased significantly over this period. The cryptocurrency was listed at around $ 3,500 at the start of last year. A year later, it was trading around $ 7,500.

Couldn't this increase simply be explained by the dollar increase in Bitcoin? The study rejects this hypothesis. According to the authors, dark web players are increasing their trade in this electronic currency. But the use of altcoins has also increased in recent years.

The mass adoption of bitcoin, as well as its ease of use and popularity, is also a contributing factor, "they add.

So during the first three months of the year, the amount of bitcoin sent to mixers has grown rapidly.

Massive Bitcoin adoption drives criminal exchanges

At the same time, the amount of bitcoins sent to exchanges requiring verification has decreased, notes Crystal Blockchain Analytics. This figure dropped from 14,073 to 5,455 BTC. This "suggests a reduction in the use of cryptocurrency exchanges for criminal activity and the darknet, in favor of more anonymous services like mixers," the study concludes.

Another lesson from the study: the increase in bitcoin transfers between darknet entities during the quarter. The objective could thus be to try to conceal the flow of bitcoins within the darknet to prevent the detection of their activities.

It also encourages darknet services to cooperate and increase their revenues internally, ”the study suggests.

If Bitcoin becomes institutionalized with the arrival of traditional finance players, the fact remains a tool for criminal activities.

It is also worrying to note that the darknet entities continue to increase the amount of bitcoin (in real value and in USD) exchanged between them. These statistics indicate that bitcoin continues to be a financial tool for darknet entities, ”the study concluded.