Web Excursions 2023-02-12
How Darknet Markets Fought for Users After Hydra’s Collapse
2022 saw a decline in revenue from the previous year for darknet markets and fraud shops.
Total darknet market revenue for 2022 ended at $1.5 billion, down from $3.1 billion in 2021.
of the top five highest-earning darknet markets in 2022
Four were conventional, drug-focused darknet markets,
while just one, Brian Dumps, was a fraud shop.
Hydra Market led the way once again as the highest-earning darknet market in 2022, even though it was sanctioned by OFAC and shut down in a joint U.S.-German operation in April
Hydra’s closure prompted a sector-wide decline in darknet market revenues,
with average daily revenue for all markets falling from $4.2 million just prior to its closure and to $447,000 immediately after.
While drug markets’ collective revenue hasn’t recovered fully, it climbed slowly back toward previous levels in the second half of 2022.
Fraud shops, however, have continued to decline.
Fraud shops are a unique segment of darknet markets that sell stolen data such as
compromised credit card information and
other forms of personally identifying information (PII) that can be used for fraudulent activity.
This decline was triggered in part by the closure of prominent fraud shops like Bypass Shop, which was shut down in March.
Brian Dumps, the biggest overall fraud shop for the year, also appears to have suffered a disruption as its revenue fell almost to zero in October, though it’s unclear exactly why.
Single vendor shops are standalone shops set up by individual drug vendors
who have typically gathered a large customer base on a larger, traditional darknet market.
Setting up a single vendor shop allows those vendors to save on fees that would ordinarily go to the administrators of a traditional darknet market.
Throughout 2022, we observed a negative relationship between funds sent to regular darknet markets and those sent to single vendor shops.
Prior to its demise, Hydra Marketplace captured 93.3% of all economic value received in the 2022 darknet market ecosystem.
In the wake of Hydra’s collapse, several markets gained revenue, but three in particular dominated: Blacksprut, OMG!OMG! Market, and Mega Darknet Market.
There is direct evidence that two of the three markets in question [Blacksprut and Mega Darknet Market] offer money laundering services.
We don’t yet have confirmation of OMG offering money laundering services, but again, the on-chain data suggests it likely does.
Advertised as “the most advanced darknet market ever,” OMG primarily provides illegal drugs, but also offers products like hacking utilities, banking information, and more.
The market has a peculiar history.
The migration of vendors, plus the timing and source of OMG’s initial revenue suggests that Hydra administrators may have been involved with the development of OMG.
Additionally, the two markets show certain operational similarities.
Hydra was unique from its competitors in that it offered location-based courier services.
Upon account creation, the user would select their location and arrange “dead-drop”-style exchanges from vendor to buyer.
Upon sale, the vendor would send the buyer geographic coordinates and a picture of where their well-hidden purchase could be found.
OMG offers this same service, too.
Musk Gets Away With Mischief
The trial was a bit odd because the judge had already decided that Musk’s “funding secured” tweet was false,
so the trial was technically about whether it was material to investors, whether they were deceived by the tweet.
But Musk did not quite say that he was going to take Tesla private, only that he was considering it, which seems to have been uncontroversially true.
(He considers lots of things.) The falsehood was “funding secured.”
a couple of ways the “funding secured” could have tricked you:
the deal would happen if he wanted it to
refuted by Musk’s testimony that he is very good at raising money and, if he had decided to move forward, it would have been no problem for him to get funding
he had already done a lot of work in structuring the deal and was serious about doing the deal.
refuted by Musk’s lawyers’ arguments to the effect of ahhhhh, come on, it is Elon Musk, nothing is all that serious, he is winging it all the time, you had to know what you were signing up for if you invested in his companies.
This stuff is contextual. Here is the lawyer for the investor plaintiffs
“This case is about whether rules that apply to everybody else should apply to Elon Musk,”
The verdict isn’t likely to become a precedent that spurs more free-wheeling corporate disclosures on social media, said Adam Pritchard, a professor at University of Michigan Law School.
That’s because other CEOs will continue to use conventional methods to communicate about company business, he said.
“He’s incorrigible. I don’t think his behavior can be reformed. There’s just too long of a track record of too much mischief.”
Here’s a juror from the trial:
“There was nothing there to give me an ‘aha’ moment; Elon Musk is a guy who could sneeze and the stock market could react.”