Cryptocurrencies

Darknet Markets Are Mixing Bitcoins at Blistering Pace: Report

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Darknet marketplaces are embracing cryptocurrency obfuscation techniques such as bitcoin mixers at a blistering pace, according to new research by analytics firm Crystal Blockchain.

BitFury’s intelligence outfit said in its “Darknet Activity Report,” released in May and recirculated Tuesday, that “darknet entities” sent $67 million with of bitcoin to transaction scrambling mixers in Q1 2020. That’s a staggering spike from the $3 million recorded in Q1 2019.

  • The rush “indicates a rapid adoption of crypto mixing services by darknet entities,” a clientele Crystal Blockchain notes has had little choice but adapt to the growing prominence of anti-money laundering safeguards on exchanges around the world.
  • Indeed, in Q1 2020, darknet marketplaces saw a 29% increase in their bitcoin take from safeguard-heavy exchanges. That’s in spite of such markets historically preferring shady exchanges that ask few questions of their users. 
  • Darknet entities may also be using inter-market transfers to hide their crypto tracks, as Crystal Blockchain identified that 19% of the space’s Q1’s bitcoin flow passed among separate darknet entities. That’s up from 10% in Q1 2019.
  • Overall, darknet markets are exchanging more dollar value in bitcoin than at any point since 2017, Crystal Blockchain said, adding, “These statistics indicate that bitcoin continues to be a financial tool for darknet entities.”

CORRECTION (July 15, 16:13 UTC): BitFury’s report was originally published in May. It was published a blog post detailing the Q1 activity on Tuesday.

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