Flashpoint threat intelligence and Chainanalysis blockchain forensics firms reported that the Russian dark web marketplace Hydra witnessed a 624% growth between 2018 to 2020. This record growth has led to the illegal darknet market processing about $1.37 billion worth of cryptocurrencies in 2020.
The high annual transaction volumes made the marketplace a key player in 2020 up from $9.4 million in 2016. Consequently, Hydra accounts for more than three-quarters of darknet market revenues globally.
Consequently, Hydra has emerged as a hotspot for illegal crypto transactions in Eastern Europe, where cryptocurrency adoption is high.
The marketplace has attracted high-profile cybercriminals, including the DarkSide gang responsible for the Colonial Pipeline ransomware attack. The threat actors sent $17.5 million or 4% of their earnings to Hydra for cashout, according to The Hacker News.
Hydra darknet market thrives despite the pandemic
Although the number of darknet purchases fell during the pandemic, total revenues rose by 23% to $1.75 billion in 2020. Hydra made a $1.37 billion profit during the pandemic in 2020, up from 9.4 million in 2016.
Hydra attributes its growth to resilience against competitors’ attacks, law enforcement crackdowns, and abuse by traders. Flashpoint and Chainanalysis noted that the darknet market only went offline temporarily during the COVID-19 onset in late March.
Uniquely sophisticated operations give Hydra a competitive advantage
Developed as a narcotic trading platform in 2015, the darknet marketplace diversified its products to include all criminal activities.
Operated by an 11-member gang, the site acts as the intermediary for providing Bitcoin cash-out services for stolen credit cards, fake currency, stolen identities, SIM cards, among others.
Hydra also provides physical cash withdrawal methods known as “Hidden Treasure” that provides criminals with readily accessible hard currency in hidden public locations.
“This physical withdrawal technique calls upon customer buyers to hire designated couriers (‘kladmen’) to bury cash underground in vacuum-sealed bags within specific agreed-upon locations for the sellers to dig up later,” the report explained.
Once the cash is secured, the sellers could bury the drugs in the same location or ship them using other means. These “Uber-like” Hydra operations reduce the risks associated with drug shipments and payments, making the platform the preferred exit point for laundered drug money.
The growth of the Hydra darknet market was also the result of the demise of the Russian Anonymous Marketplace (RAMP). Hydra started as a less-antagonistic competitor for RAMP in 2015. Most RAMP members migrated to the Hydra darknet marketplace after the former shut down.
Draconian regulations prevent seller-abuse and crackdown by authorities
Hydra also thrives because of the draconian regulations that the darknet marketplace operators…