Darknet Markets slow to recover after Hydra's demise

02/16/2023Darknet News

As the former enormous Hydra Market fell as a result of coordinated actions by authorities in Germany and the United States, the blockchain analytics company Chainalysis released a new research outlining the dynamics of darknet markets and fraud businesses.

The average daily revenue for all dark web marketplaces decreased from $4.2 million to $447,000 after the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) sanctioned Hydra in April and German officials demanded its liquidation.

Darknet market sales fell significantly from $3.1 billion in 2021 to $1.5 billion in 2022. Since most fraud businesses earned their initial market share after the platform’s failure, other marketplaces most likely focused their efforts on luring former Hydra sellers and consumers.

According to the analysis, three significant darknet markets rose to prominence as a result of Hydra’s demise. Although they did not have revenues as high as Hydra, Mega Darknet Market, Blacksprut Market, and OMG!OMG! Shares on the market increased.

Significantly, the three platforms each held sway over the market for a while. The first was OMG, whose reign of terror began right after Hydra’s defeat.

OMG started operating in July 2020, but due to its extremely low deposit quantities, it was more of a private business than a darknet market. However as soon as Hydra collapsed, the platform saw significant inflows, the majority of which came from Hydra counterparties.

The influxes persisted up to a distributed denial of service (DDoS) attack against OMG in June. Vendors and customers moved to Blacksprut Market and Mega Darknet Market as a result of the attack. In November, Blacksprut was also compromised, prompting users to switch to Mega Market.

Nonetheless, OMG saw more activity and inflows in 2022 than Blacksprut and Mega Markets.

OMG’s central wallets use a set of deposit addresses that were previously used by Hydra, which is controlled by a high-risk exchange that mostly operates in Russia, according to on-chain data, which is interesting.

Although not as much as OMG, Blacksprut and Mega paid money to the same set of addresses. This implies a vendor or administrative overlap among all four markets, but particularly between Hydra and OMG.