Cybercriminals are making more and more profit by setting cryptocurrency checked accounts over the dark web

May 26, 2021 07:22 GMT  ·  By

Dark web marketplace in Russian Hydra has emerged as a hotspot for illegal activities, attracting $1.37 billion in cryptocurrencies in 2020, up from $9.4 million in 2016, according to The Hacker News.  

The blistering acceleration in annual transaction volumes represents a whopping 624% year-over-year increase from 2018 to 2020.

Flashpoint cybersecurity company said in a report jointly published with blockchain analysis firm Chainalysis that "Further buoying Hydra's growth is its ability—or its good fortune—to remain running and unscathed against competitor attacks or law enforcement scrutiny; its only downtime of note occurred during a brief time period at the beginning of the COVID-19 global pandemic in late March 2020".

Hydra, that has been in operation since 2015, began as a competitor to the now-defunct Russian Anonymous Marketplace (also known as RAMP) that primarily facilitated drug trafficking. Afterward, it evolved into a bazaar for all things criminal, including offering BTC payout services and peddling stolen credit cards, SIM cards, documents, IDs, and counterfeit money, with operators profiting as intermediaries for every transaction conducted.

Hydra accounts for more than 75% of global DarkNet revenue

According to a Chainalysis study released in February 2021, Hydra accounts for more than 75% of global darknet market revenue in 2020, placing it as a major player in the crypto crime landscape in Eastern Europe.

This surge in cryptocurrency activity on the marketplace can be traced in part to RAMP's demise in September 2017, that culminated in a mass migration of cybercrime gangs to Hydra.

However, Hydra administrators have imposed strict conditions on sellers since July 2018, requiring that outgoing withdrawals of cryptocurrency proceeds from their wallets be routed to regionally operated crypto exchanges and payment facilities to be converted into Russian fiat currency. There are also restrictions preventing sellers from withdrawing funds until they have either successfully completed more than 50 sales transactions or have maintained an account balance of at least $10,000.

"Upon completion of the buyer portion of the transaction, the money trail goes dark as more veiled, in-region financial operators and service providers manage the sellers' finances and convert cryptocurrency withdrawals into difficult-to-trace Russian fiat currencies as the next step in the financial chain," the researchers said.

These payout restrictions have made Hydra seller accounts a coveted commodity on numerous underground forums. Moreover, this marked the birth of a new discard market where cybercriminals purchase an existing seller account to gain direct access to the marketplace and completely bypass Hydra policies and compliance controls.