- The darknet sector is the 6th largest crypto-operation in Eastern Europe.
- Hydra is more common than some of the most popular exchanges.
- Yet, the darknet marketplaces are only a little part of the cryptocurrency economy in Eastern Europe.
The crypto-driven black marketplaces are one of the biggest cryptocurrency networks in Eastern Europe, a year-long report by blockchain research company Chainalysis reports.
In its Geography of Cryptocurrency Research this year, an extract of which was released today, Chainalysis discovered that the Hydra Darknet is the 6th biggest cryptocurrency service in the area, comprising of Russia, Ukraine, and other nations.
Darknet marketplaces are online black marketplaces where drugs, fake passports, and other illegal products and services can be purchased and sold with the help of digital coins. No other area has a darknet or a similar illegal service in its top 10 marketplaces.
Indeed, Chainalysis saw that Eastern Europe is the global center for darknet marketplace activity, with 21 percent of the globe’s darknet marketplace activity taking place in the region. The area sends an overall number of $41 billion to criminal organizations or 1.4 percent of its overall transaction value.
What makes these results interesting is that its blockchain analysis program is one of the few that can figure out the way crypto travels across the globe. This tech assists Chainalysis in pinpoint darknet markets and then monitors money coming in and out of wallets operated by these services.
As an outcome, we may see where all the cash goes as it exits darknet markets, according to Chainalysis’s research officer, Kim Grauer.
Grauer saw that when cryptos leave the darknet, the most frequent form of service that funds provide are mainly Eastern European ones. Other, more obvious hints, such as Russian-language ads, assisted in pointing research in the correct direction.
Moreover, the research concluded that Eastern Europe is the global leader in ransomware, according to the report conducted between July 2019 and June 2020. About 23 percent of the funds that victims send to ransomware addresses can be tracked back to the area. This may be so due to the fact that schools in Russia are pushing for high school students to study code. Combine that with a bad GDP, and a climate of state-sponsored happens
Crime, however, is just a small section of the cryptocurrency economy in Eastern Europe. Chainalysis has concluded that Ukraine and Russia are the global leaders in cryptocurrency adoption.
Its Global Adoption Index, which makes for the size and wealth of a nation, shows that nations use cryptos, an asset class that many still see as speculative. In the last year, Chainalysis reports that Russia sent more than $16.8 billion in digital coins and got back $16.6 billion; Ukraine sent $8.2 billion and got back $8 billion.
While these figures are much smaller than the levels we see for China, the US, and other top nations, there is a much bigger rate of acceptance when we take into account the scale of both nation’ populations and economies, the research states.
One contributing factor can be the common distrust of the Russian banking system. What Chainanalysis has learned is that cryptocurrency is less costly, easier to afford, and very ubiquitous in Ukraine and Russia, particularly when it comes to cross-border payments, and only has access in a censorship-resistant manner.
Leaving Eastern Europe for a moment, Grauer said that the study presents the fact that crypto is indeed a worldwide phenomenon since nearly every nation had some crypto-activity in it.