A Peek At What Happens During And After A Market Shutdown


Just like most industries, the dark-net ecosystem has its fair share of ups and downs. The difference is that one specific thing to dark-net markets can be pointed out. The ups and downs are not as smooth as traditional marketplaces on the clear-net.

The Instabilities of the Dark-Net

The dark-net has changed tremendously over the past couple of years. Markets no longer stay around for long periods of time, but come and go like crazy. No matter if the market gets seized, or if a market finds a reason to exit scam, a competitor takes its spot instantly. Specifically the past couple several months have been marked with huge disruption.

One common observation can be made on the dark-net that is similar to clear-net markets. The entry of new marketplaces set to replace their fallen counterpart. Markets line up to become the next big dark-net market, if a market is bad they are kicked out of before reaching the top.

Although very unstable, the dark-net still resembles a free market economy in a few ways. The bankruptcy of a retail store can be used as an example. When one goes bankrupt, a standard pattern of corporate and political events go on. Signs that the store is closing start to appear, many lose their jobs and customers need a new place to shop at. This is exactly what happens on the dark web when a marketplace decides to shut down.

The Cycle of the Dark-Net

The death of a dark-net market begins as follows. First the market servers crash - go offline. This event is then followed by a period of silence and absence of information. When exit scamming, it is not uncommon for market admins to reassure their return. This reassurance is also called the "explanation" by most dark-net users. Almost every time, the explanation given refers to the markets downtime as "temporary".

Sooner or later the true explanation becomes apparent to most users. This pattern accurately represents the stages of a market exit scam over the last years. Sometimes the market might have a real reason like in the case of Dream Market. Dream Market was forced to shut-down after not being able to manage all the DDoS attacks. The market allowed its users to withdraw funds after the shutdown.

Despite that, most users are paranoid then the chain of events begins. Most people are now afraid of markets exit scamming and take the admins with a grain of salt. There are three main scenarios that can cause a market crash.

When Law Enforcement Strikes

Law enforcement operations have led to the closure of dark-net market more than once. The dark-web economy started growing so rapidly that law enforcement had to act. At first law enforcement was targeting dark-net markets in order to reduce sales. After realizing that these efforts are pointless, law enforcement changed tactics. Markets are now seen as tools containing tons of valuable data that can lead to arrests.

A law enforcement takeover is quite unique and hard to notice. The market typically goes down for a few days after if is seized but soon after it can go back up. Law enforcement agents can operate a market for up to 30 days to gather data. In some cases the takeover can go unnoticed if the hosting service decides to work with agents. Some time after that the market goes down and a banner claiming that the site got seized appears when trying to access the market.

Exit Scams

Dark net market exit-scams have become way to common. Whenever a market goes offline for a while, it is most likely an exit scam. These days, markets look for any reason to exit scam. One of the largest - latest examples involves Empire Market. After falling victim to continuous DDoS attacks the market went offline. The market never came back up. Unlike Dream Market, Empire decided to leave the scene with everyone's money. It is estimated that over $30 Million was stolen from Empires users.

Hostile Takeover

A hostile takeover is when a competing platform decides to take down the competition. A hostile takeover can occur in many ways and can involve anything from simple DDoS attacks to more complicated hacking. The end goal is to take the competition down and damage their reputation as much as possible. When it comes to the dark-net, market downtime means that people will be looking for alternatives. This is exactly what competition needs.

The Future of the Dark-Net

The last few months have been very unstable. Not only the dark-net witnessed a handful of exit scams, but the law enforcement is not targeting it harder than ever. Multiple dark-net related arrests have been made over the last couple months. Europol has also announced the end of the dark webs golden era.

Ignoring the Empire Market and Icarus exit scam, Operation DisrupTor has been announced. It is credited with leading agencies to countless arrests and large drug seizures. Millions of dollars in cryptocurrency have been seized too.

While the dark-net is going through a rough period, it is not going anywhere any time soon. Law enforcement agencies are overestimating the power of their operations. Not even a dent has been made by the recent operations. The recent exit scams have affected users more than recent law enforcement campaigns. While millions of dollars have been seized, the industry is still worth billions. These are forcing criminals to adapt and find clever ways to stay off the radar.

Although still settling after the storm, today the dark-net is only increasing in size. Criminals are inventing cutting edge technology and advanced dark-net business models. The government is only motivating these criminals to do better.