Crypto Jul 30, 2020

Almost 1 Million Bitcoin Is Held by Darknet Markets, Crypto Scammers and Hackers

Studies conducted by notable blockchain analytic firms indicate the massive…

The latest analyses conducted by notable blockchain intelligence firms have intimated the status of Bitcoin holdings within the darknet and cybercriminal circles.

The findings, as interesting as they were, showed that almost 1 million Bitcoin was being held by bad actors. It also turned out that crypto exchanges serve the majority of darknet users by helping them conduct bitcoin-to-fiat conversions.

In addition, experts discovered that a host of bad actors depend on crypto mixing services to obscure the origins of their bitcoins.

According to data collected by blockchain analytics firm Chainalysis about 4.81 percent of the global Bitcoin supply is in the hands of bad actors – its new Market Intel Report places the figure at 891,781 BTC.

The above figure represents $9.7 billion worth of funds that reportedly accounts for the amount of cryptocurrency that’s being “cleaned” through traditional financial institutions and crypto exchanges by money launderers.

Specific details show that the Chainalysis researchers discovered that in a span of one week, dark web users had transferred 367 Bitcoin (with the equivalence of $3.7 million) to crypto trading platforms. About 437,000 worth of Bitcoin was sent to crypto mixing services while 204,000 was placed to other services.

The above scenario is referred to as layering within money laundering circles – it involves the complex movement, transfer or exchange of money to obscure its real origins. A successful money launder will only be considered so after they manage to circumvent detection of the tainted coins by crypto exchanges, and integrate said funds into the legitimate financial system.

Darknet Users Sending BTC to Exchanges and Mixers

A separate research conducted by Bitfury’s Crystal Blockchain highlighted the role of Bitcoin mixing services and exchanges in enabling the darknet economy.

The crypto analytics firm noted the significant growth in the application of Bitcoin mixing services by dark web entities.

Specific figures indicated that the amount of Bitcoin sent to mixing services by dark web platforms increased to 20 percent in the first quarter of the year 2020 (Q1 2020) – a statistic that was in sharp contrast to Q1 2019’s 1 percent rise.

In the context of crypto exchange-darknet interactions, the report discovered that the Bitcoin share transferred to AML/KYC-compliant crypto exchanges dropped to 13 percent in Q1 2020. The estimates were in contrast to Q1 2019’s 24 percent decrease.

According researchers at Crystal Blockchain, the numbers associated with Bitcoin interactions between darknet entities and exchanges with strict verification requirements provide important insights.

It is inferred that the decrease in figures within the above context point out to the fact that dark web markets have been responding to increased regulation within the crypto industry – with bad actors choosing alternative trading services for money laundering reasons. The assumption follows the reality that Bitcoin mixers work by combining user payments into a single transaction to hide the crypto origins.

In total, dark web platforms transferred 7,946 Bitcoins to crypto mixing services in Q1 2020 – the Q1 2019 statistic stood at 790 Bitcoins. The Crystal Blockchain report reflected the crypto stats to a phenomenal $64 million growth in the value of Bitcoin sent to mixers in Q1 2020.


To conclude, the blockchain transparency provides a window of analytical firms to trace threat actors’ crypto-related activity across the world. Blockchain analysis firms such as Chainalysis and Crystal Blockchain have played a key role in assisting law enforcement crack down on cybercriminal cells.

Point to note, Crystal Blockchain lifted the lid on the destination of Bitcoins lost through the recent widely-publicized twitter hack – the firm reported that some of the crypto gained by hackers behind the brazen online attack ended up in Coinbase and BitMex crypto exchanges.




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