Darknet markets are increasingly gravitating back to bitcoin (BTC) as their main cryptocurrency due to escalating issues with liquidity and accessibility of privacy-focused coins like monero (XMR), as stated by the cybercrime research head at a blockchain analytics firm.
“Following the delisting of XMR from major exchanges, we noticed a substantial uptick in bitcoin inflows,” he mentioned during a discussion. “The limited availability of these privacy coins is prompting users to revert to bitcoin.”
Many darknet markets in Western regions — areas of the internet that exist within encrypted networks and can only be accessed using specific anonymity tools — had predominantly shifted to using monero or were operating it alongside bitcoin prior to these delistings. The use of XMR declined notably after it was taken off various significant trading platforms.
In late 2023, OKX removed XMR along with other privacy-centric cryptocurrencies like dash (DASH) and ZCash (ZCH). Then, in February 2024, Binance revealed its intention to delist monero.
“When a coin or token fails to meet our standards or the industry landscape transforms, we carry out a thorough evaluation and may decide to delist it,” Binance commented at that time.
Recent data from BitInfoCharts indicates that the daily transaction volume of monero has halved since the same period last year.
“For a currency to be an effective medium of exchange, it requires a certain level of liquidity and accessibility,” he explained.
The researcher highlighted that illegal cryptocurrency transactions comprise only a small fraction of overall crypto activity.
“Typically, illicit transactions amount to around or below 1% of all crypto processes. While it is important to address these issues, inaccurately categorizing crypto as wholly negative is misguided and unproductive.”
Data indicates that approximately 0.14% of total crypto transactions, translating to roughly $50 billion, are tied to illicit activities, with a notable uptick in the use of stablecoins for such purposes.
In response, stablecoin issuers are taking action; a coalition led by Tron, which includes USDT issuer Tether and TRM Labs, has frozen over $100 million in illicit funds.
The researcher also pointed out that law enforcement agencies focus on darknet markets primarily based on their size and connection to the fentanyl trade.
The presence of fentanyl significantly increases the likelihood of a darknet market drawing law enforcement scrutiny, he stated, as combating this drug is a priority for international law enforcement.
Indeed, one of the most recent operations against a darknet market was the takedown of the Nemesis platform. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) explicitly referred to the market’s involvement in the fentanyl trade as a key reason for its closure.
Consequently, OFAC imposed sanctions on several crypto wallets associated with its operator, blocking 44 BTC addresses and 5 XMR wallets.