Move over Hydra, OMG!OMG! is the darkweb’s latest trojan horse

A new Chainalysis report has found that sanctions have not dampened the presence of dark web marketplaces selling illicit drugs and services online.

The report found an unusual year-on-year decline in sales.

Darknet Market and Scam Shops Revenue, 2020-2022 (Source: Chainalysis)

According to Chainalysis, a blockchain intelligence firm, the shutdown of Hydra – one of the world’s largest dark websites – in 2022 resulted in a significant drop in overall market revenue. Nevertheless, new websites have sprung up since then.

The report states that after Hydra, providers soon migrated to several other platforms.

Using on-chain analysis, the researchers found that wallets were previously linked. Accounts soon began to appear at Hydra OMG! OMG! Marketplace too.

Both platforms share a similar business model based on selling drugs via geographic coordinates, where packages remain hidden in parks and other public places, the locations of which are later sent to customers who pay with crypto, often organized through encrypted messaging apps like Telegram.

The Post-Hydra Darkweb

The dark web after Hydra is also populated by other players. Hydra was once the most successful marketplace for illegal goods and services, including drugs, forged documents, and money laundering, with most of its users based in Russia and surrounding countries.

The platform offered cryptocurrency withdrawal services and even announced plans to launch its Initial Coin Offering (ICO) in 2019, plans that never came to fruition.

Top 25 Darknet Markets and Scam Shops by Revenue (Source: Chainalysis)

In April 2022, the US government added Hydra’s cryptocurrency wallets to its sanctions list, and German authorities shut down the platform and confiscated 543 bitcoins worth about $25 million from their wallets.

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However, after the closure of Hydra, not only several competitors appeared OMG! OMG!, also Blacksprut and Mega Darknet Market.

Chainalysis reported that all three used a standard set of deposit addresses on a high-risk exchange with a significant presence in Russia. A separate blockchain intelligence firm, TRM Labs, said that Hydra’s competitors saw an inflow of $820 million in cryptocurrency deposits in the wake of Hydra’s sanctioning.

With the loss of market share, other competitors got creative. One company parked a bus with its logo painted on it in central Moscow, and Vice reported that it also projected its ad onto a large building in Moscow.

According to the report, by May 2022 OMG! OMG! had captured 50% of the market share of dark web activity in Russia, but lost it due to a distributed denial of service (DDoS) attack in May. Vice also reported that it’s not uncommon for competitors in this business to hire hacking mercenaries to destroy each other’s sites.

Other darkweb earnings

Hydra’s closure ultimately led to an industry-wide drop in sales, the Chainalysis report said. In 2021, dark web shops cumulatively generated $2.6 billion in total revenue, the report said. In 2022, however, that number dropped to $1.3 billion. Chainalysis reports that the market’s average daily earnings have plummeted from $4.2 million before Hydra’s shutdown to just $447,000 immediately after the shutdown.

In addition, the report found that the closure of another drug marketplace, Bypass Shop, another Russian business reportedly shut down by police, also contributed to the overall drop in sales.

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However, Chainalysis found that while drugstore revenue has been gradually recovering since the second half of 2022, websites selling illicit goods other than drugs, such as B. stolen personal or bank data, continued to show a decline in sales. For example, Brian Dumps, the largest marketplace for stolen banking data in 2022, saw sales plummet to near zero in October for unknown reasons, according to the Chainalysis report.

Posted in: Analysis, Crime

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