Cryptocurrency prices on the dark web are plummeting, causing a “bank run” and creating challenges for crypto exchanges. Security researchers have discovered that the declining value of cryptocurrencies, which has reached up to $1.8tn since November last year, is leading to a rush by holders to exchange their crypto for more stable currencies.
This trend is not only affecting regular cryptocurrency exchanges but also impacting exchanges on the dark web. These dark web exchanges, which operate outside of regulated financial markets and do not conduct identity checks on users, serve as a means for users to convert money from services like Revolut or PayPal into crypto, albeit with hefty fees.
Dov Lerner, security research lead at Cybersixgill, highlighted that the dark web exchanges have been hit hard by the cryptocurrency crash. While these exchanges have invested in branding and marketing to establish trust, there has been a noticeable decline in their activity since the market downturn. None of the 34 known actors operating crypto exchanges in 2021 are currently promoting their services, signaling a significant slowdown in the dark web exchange ecosystem.
The decrease in cryptocurrency values has also impacted the purchasing power of dark web actors, as transactions on the dark web are typically priced in dollars. With crypto prices dropping, actors may struggle to cover their costs and maintain their operations. This loss of liquidity is expected to disrupt commerce on the dark web temporarily, but there is optimism that a resurgence in crypto values could revive the dark web exchange market.
In conclusion, the cryptocurrency crash is exerting pressure on both legitimate and dark web exchanges, leading to a slowdown in withdrawals and a strain on reserves. While the current challenges may dampen dark web activity in the short term, the potential for a rebound in cryptocurrency values could reignite interest in dark web exchanges in the future.