Cryptocurrency markets are often associated with crime due to their ability to aide in anonymity.
Despite recent plummets in value and attempts by regulators to rein in crypto activity, a new report by Chainalysis indicates that Bitcoin is still thriving on the dark web.
This certainly bolsters the case for those who claim that cryptocurrency is a resource for criminal activity, as common dark web commodities include illicit drugs and weapons.
Bitcoin & the Dark Web: Forever Linked
There is no denying that the dark web and cryptocurrencies will be forever intertwined thanks to the ecosystem of darknet markets which exclusively use Bitcoin and altcoins as a means of trade.
Despite the shut down of some darknet markets, law enforcement and the government at-large continue to rail against cryptocurrencies such as Bitcoin, claiming that it is still primarily a tool for criminals.
Notable economist Nouriel Roubini testified before a U.S. Senate Committee and attempted to argue that the entire cryptocurrency space was filled to the brim with scams and fraudsters.
Roubini is famous for predicting the 2008 global financial crisis, which earned him the nickname “Dr. Doom,” but many believe that his ties to central banks and various governments might be the reason he has nothing positive to say about Bitcoin, or cryptocurrency in general.
The Shift to Legitimacy
Last October, DEA agent Lilita Infante stated that Bitcoin and its immense volume wasn’t due to any rise in cybercrime, but was simply a result of speculators buying and selling Bitcoin in the hope of profiting.
She stated that the ratio had “flipped,” and that while previously 90 percent of Bitcoin volume was associated with crime, she estimated that only 10 percent was now related to criminal activity and the majority of Bitcoin volume was trading through legitimate means.
Of course, this doesn’t mean that the total volume on the dark web had decreased, only that the ratio of darknet to legitimate use had decreased.
But this is certainly substantial when viewed in the context of trends and patterns.
Further confirming the trend towards legitimacy, it appears that Bitcoin is actually more traceable than many realized.
Various tech firms have increasingly been able to link cryptocurrency wallets to real-world identities, contributing to the increase in arrests related to cryptocurrency and cybercrime.
New Chainalysis Report
Chainalysis has made quite the name for itself with regards to cryptocurrency markets, and aims to become the leading solution for both compliance and investigative issues in the sector.
They recently released a report stating that Bitcoin is alive and well on the dark web, despite the concerted efforts of both law enforcement and regulators to contain its activity.
If there is one thing that we know about the dark web, it’s that it is resilient.
While law enforcement often does make headway on the dark web with regard to criminal organization, it appears that as soon as one market is shut down, another is created to replace it, or activity shifts to another already established platform.
The shutdown of AlphaBay in 2017 provides a clear example.
The FBI shut down the marketplace after raids in multiple countries whereupon there was a clear decrease in darknet activity.
Previously, Bitcoin flowing to darknet markets had hit $700 million, but after the AlphaBay shutdown, volume slowed by a staggering 60 percent.
However, over time the volume has picked back up thanks to the emergence of new marketplaces.
The report by Chainalysis shows the small decrease of Bitcoin influx to darknet markets despite the shutdown of AlphaBay, indicating the swift redirection of market activity to other platforms.
It is clear that despite the intentions and actions of law enforcement and regulation, Bitcoin activity on the dark web is still continuing its flow.
If Bitcoin’s use as a currency for darknet trading is going to be contained with any degree of permanence, it will need to be through a route other than shutting down market platforms.
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