Monero (XMR) Has, for the First Time, Emerged as a Superior Option for Darknet Markets and Fraud Shop Operations.

This article explores the reasons why Monero (XMR) has, for the first time, emerged as a superior option for darknet markets and fraud shop operations.

In a surprising turn of events, XMR (Monero) has, for the first time, emerged as a superior option for both darknet markets and fraud shop operations. A recently released report from Chainalysis shows that despite a record surge in crypto-related crime in 2024, inflows to darknet markets (DNM) and fraud shops decreased.

Specifically, darknet markets received just over $2 billion in Bitcoin on-chain, and fraud shops saw $225 million, indicating a 50% drop compared to the previous year. However, the report highlights a significant shift in payment preferences.

Monero (XMR) is known for its privacy-focused features, which ensure fully anonymous and untraceable transactions. In contrast to Bitcoin, Monero uses advanced cryptographic techniques like ring signatures, stealth addresses, and RingCT to effectively mask the sender, receiver, and transaction amounts.

While Monero is typically recognized for its role in financial privacy, its anonymity is also a key factor in its illicit use on darknet markets. Law enforcement agencies face difficulties in tracing Monero transactions, rendering it more challenging to track than Bitcoin.

Moreover, Monero’s fungibility ensures that no coin carries a “tainted” history, further solidifying its status as a preferred cryptocurrency among those seeking true financial confidentiality.

Darknet markets are encrypted online platforms where users can buy and sell goods in complete anonymity. They are usually accessed via the Tor or I2P networks and transactions are settled using cryptocurrencies, such as Bitcoin or Monero.

Although some of these markets cater to privacy-conscious users who engage in legal activities, a large portion are involved in facilitating the trade of narcotics, counterfeit documents, hacking tools, and other illicit goods. Despite efforts by law enforcement agencies to shut down these markets, they are quickly replaced by new ones.

Fraud shops, a subset of darknet markets, specialize in selling stolen financial data. This can include credit card details, hacked email and social media accounts, and identity documents. They operate with extremely strict security measures, such as invite-only access and advanced encryption protocols, making them exceptionally difficult to shut down permanently.

Delisting of XRM (Monero)

DNMs used CEX less in 2024 with a focus on DeFi infrastructure, which favored the use of XRM compared with previous years. One of the key factors that drove these changes was the delisting of XRM on centralized exchanges.

The delistings started gaining momentum as early as 2020 and 2023 with regulators pressuring exchanges to comply with anti-money laundering (AML) and know-your-customer (KYC) requirements. BitBay was among the first to remove Monero in 2020, and Bittrex followed in January 2021.

Later, Kraken restricted XMR trading in the UK in November 2021, and Huobi delisted it in September 2022. Binance also delisted Monero from its platforms in France, Italy, Poland, and Spain in February 2024.

However, it’s important to note that despite these delistings, Monero remains available on several decentralized exchanges and a few centralized platforms that do not strictly enforce AML regulations.

Another important development was the shutdown of UAPS, a major payment processor used by fraud shops. This move, along with intensified efforts by both US and international authorities to close down services catering to fraudsters, led fraud shops to turn to XRM.

This shift was also driven by a change in payment mode from Bitcoin (BTC) to Monero (XMR) in fraud shops, similar to the trend observed in darknet markets.

According to Chainalysis, DNMs, often recognized for their role in illicit drug trade, differentiated themselves further in 2024 by offering diverse service packages. However, this pattern varies; for instance, in Russia, DNMs are heavily concentrated on facilitating illicit drugs and received the majority of their revenue from cryptocurrency transactions.

Russia-based darknet markets (DNMs) displayed stability in 2024. Yet, Kraken DNM attained the highest earnings, surpassing Mega.

Mega’s revenue witnessed a decline of over 50% compared to the previous year, while Kraken DNM experienced a nearly 68% rise in its revenue. Kraken DNM, which claims to be the successor of Hydra Market, received a total of $737 million in cryptocurrency transactions in 2024.

Abacus Market and the Western world

Abacus Market emerged as the highest-earning darknet market (DNM) serving Western customers in 2024, processing $43.3 million in crypto transactions. Since 2021, their revenue underwent a dramatic growth; in 2024 alone, it surged by 183.2% compared to the previous year