XMR (Monero) has, for the first time, emerged as a superior option for darknet markets and fraud shop operations.
A recently released report from Chainalysis shows that despite a record surge in crypto-related crime in 2024, inflows to darknet markets (DNM) and fraud shops declined.
Darknet markets received just over $2 billion in Bitcoin on-chain, while fraud shops saw $225 million, showing a 50% drop compared to the previous year.
Monero (XMR) is a privacy-focused cryptocurrency that ensures fully anonymous and untraceable transactions. Unlike Bitcoin, it uses cryptographic techniques like ring signatures, stealth addresses, and RingCT to obscure sender, receiver, and transaction amounts.
While Monero is favored for financial privacy, its anonymity also attracts illicit use on darknet markets. Law enforcement struggles to trace its transactions, making it harder to track than Bitcoin. Its fungibility ensures no coin carries a “tainted” history, making it a top choice for users seeking true financial confidentiality.
Darknet markets are encrypted online platforms where users buy and sell goods anonymously, often using Tor or I2P and cryptocurrencies like Bitcoin or Monero. While some serve privacy-conscious users, many facilitate illegal trade, including drugs, counterfeit documents, and hacking tools. Despite law enforcement crackdowns, new markets frequently emerge.
Fraud shops, a subset of darknet markets, specialize in selling stolen financial data, including credit card details, hacked accounts, and identity documents. They operate with strict security measures like invite-only access and encryption, making them difficult to shut down permanently.
Delisting of XRM (Monero)
DNMs used CEX less in 2024 with a focus on DeFi infrastructure, which favored the use of XRM compared with previous years. One of the key factors that drove these changes was the delisting of XRM on centralized exchanges.
The delistings started gaining momentum between 2020 and 2023 as regulators pressured exchanges to comply with anti-money laundering (AML) and know-your-customer (KYC) requirements. BitBay was among the first to remove Monero in 2020, followed by Bittrex in January 2021.
Kraken restricted XMR trading in the UK in November 2021, and Huobi delisted it in September 2022. Binance also removed Monero from its platforms in France, Italy, Poland, and Spain in February 2024. Despite these delistings, Monero remains available on certain decentralized exchanges and a few centralized platforms that do not strictly enforce AML regulations.
An important payment processor for fraud shops, UAPS, was shut down. This, along with increased efforts by US and international authorities to shut down fraud-related services, led fraud shops to start using XRM. Another reason was a switch from Bitcoin (BTC) payments to Monero (XMR), which is similar to a trend seen in darknet markets.
Per the report, DNMs, which are known for the illicit drug trade, have differentiated themselves with unique service offerings. However, this pattern is not universally observed. In places like Russia, DNMs are heavily focused on facilitating illicit drugs, which receive payment via cryptocurrencies such as BTC and now XRM.
Chainalysis has released its report covering the activities of Ransomware and payments in 2024: Check now
Russia-based darknet markets (DNMs) remained stable overall. However, Kraken DNM became the top-earning market in 2024, surpassing Mega.
Mega’s revenue declined by over 50% compared to the previous year, while Kraken DNM’s revenue grew by nearly 68%. Kraken DNM, which claims to be the successor to Hydra Market, received $737 million in cryptocurrency transactions in 2024.
Abacus Market and the Western world
Abacus Market emerged as the highest-earning darknet market (DNM) serving Western customers in 2024, processing $43.3 million in crypto transactions. Since 2021, their revenue has grown significantly, and in 2024 alone surged by 183.2% compared to the previous year.
Abacus Market is a popular dark web marketplace launched in September 2021, following the closure of AlphaBay. It offers over 40,000 products, including drugs, fraudulent digital products, piracy services, and malware. The market is valued at approximately $15 million and uses Bitcoin and Monero for transactions.
According to Chainalysis, several factors likely contributed to this dramatic growth. The closure of major competing DNMs drove more users to Abacus Market. Additionally, some darknet markets started accepting only Monero (XMR) instead of Bitcoin (BTC), making Abacus more attractive to buyers who preferred XMR.
Another key factor was the delisting of XMR by some centralized exchanges (CEXs), making it harder for users to access, which may have further boosted BTC-based transactions on Abacus Market.
A graphical representation of the rise of Abacus Market shows its sales in BTC increased sharply after ASAP Market—another darknet market) shut down in July 2023 and rose even further when certain exchanges removed XMR from their listings. This suggests that changes in competition and payment options played a major role in Abacus Market’s rapid expansion.
