Darknet markets are increasingly relying on bitcoin (BTC) as their cryptocurrency of choice. This change comes in the wake of major exchanges delisting privacy tokens like monero (XMR), which has forced users purchasing illicit goods to pivot back to bitcoin for better liquidity and broader accessibility.
Key Highlights
- Bitcoin Reclaims Dominance: Following the delisting of privacy coins, bitcoin has reemerged as the primary medium of exchange on darknet platforms.
- Illicit Activity in Crypto: Despite perceptions, illicit transactions represent only about 0.14% of all cryptocurrency activity, amounting to roughly $50 billion.
- Law Enforcement Focus: Authorities are prioritizing investigations based on market size and involvement in the fentanyl trade—a key factor that escalates scrutiny.
Transitioning from Monero to Bitcoin
Eric Jardine, cybercrime research lead at Chainalysis, explains that “after major exchanges delisted XMR, we observed a significant increase in bitcoin inflows.” Many darknet market users had previously embraced monero for its privacy features, often operating with it in parallel with bitcoin. However, once exchanges such as OKX and Binance began removing privacy coins in late 2023 and early 2024, monero’s accessibility dropped dramatically.
Exchange Delistings and Market Dynamics
Major platforms have taken definitive action against privacy tokens perceived as potential facilitators of illicit behavior. OKX removed monero, dash (DASH), and ZCash (ZCH), while Binance announced its intention to de-list monero in February 2024 based on evolving industry standards. On-chain data confirms these developments, showing that daily monero transactions have been halved compared to the previous year. Jardine emphasizes the necessity for any effective medium of exchange to provide liquidity and wide accessibility—attributes where bitcoin clearly excels.
Law Enforcement and Fentanyl Trade Implications
Beyond cryptocurrency trends, law enforcement agencies are intensifying their focus on darknet markets based on market scale and involvement in the fentanyl trade. Jardine notes that platforms become far more susceptible to regulatory attention when they enable the sale of fentanyl. Different markets exhibit varying levels of sensitivity regarding these transactions; some claim to restrict fentanyl-related sales but are still involved in selling precursor products, thereby drawing unwanted attention.
A notable case involved the bust of the Nemesis online market, where the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) specifically cited its role in facilitating the fentanyl trade. As a result, OFAC sanctioned several crypto wallets linked to the operator, Behrouz Parsarad, including 44 BTC addresses and 5 XMR wallets.
Understanding Illicit Crypto Activity
Even as the focus on darknet market activities intensifies, industry experts stress that illicit transactions account for only a small fraction of overall crypto activity. Jardine clarifies that such transactions typically remain at or below 1% of total crypto exchanges. Chainalysis data further supports that approximately 0.14% of all crypto transactions, or around $50 billion, are linked to illicit practices. Moreover, the rise of stablecoins as an illicit payment mechanism has prompted countermeasures from blockchain stakeholders. For example, the Tron-led T3 Financial Crime Unit—comprising partners like Tether and TRM Labs—recently froze over $100 million in funds suspected of being involved in illegal activities.
