Darknet Markets Shift Back to Bitcoin Following Monero's Binance Delisting

Darknet Markets and the Rise of Bitcoin

As privacy coins face mounting challenges, including delistings from key exchanges, Bitcoin is reclaiming its status as the go-to currency for darknet transactions. Eric Jardine, the cybercrime research lead at Chainalysis, notes that "after major exchanges delisted XMR, we observed a significant increase in bitcoin inflows." This trend suggests that the reduced accessibility of privacy coins is steering users back toward Bitcoin, which offers greater liquidity and acceptance across platforms.

The Impact of Regulatory Actions

The delisting of Monero, alongside other privacy-focused tokens such as Dash and ZCash, represents a broader trend of regulatory actions against cryptocurrencies perceived as facilitating illicit activities. Binance announced its decision to remove Monero in February 2024, stating, "When a coin or token no longer meets this standard, or the industry changes, we conduct a more in-depth review and potentially delist it." This statement reflects the ongoing scrutiny that cryptocurrencies face and how compliance with regulatory standards is shaping the market.

The Scale of Illicit Activity

Despite the focus on illicit transactions, it is crucial to note that they constitute a small fraction of overall cryptocurrency activity. Chainalysis data reveals that only 0.14% of all crypto transactions, or about $50 billion, involve illicit activities. Jardine emphasizes, "Typically, illicit transactions constitute at or below 1% of total crypto activities." This statistic serves as a reminder that while the darknet market is a concern, it does not represent the entirety of the cryptocurrency ecosystem.

Fentanyl and Law Enforcement Priorities

Law enforcement agencies are particularly focused on darknet markets involved in the fentanyl trade. The presence of fentanyl significantly increases the likelihood of a market attracting attention from authorities. Jardine explains, "Markets have sort of varying levels of sensitivity to fentanyl-related sales." This heightened scrutiny is evident in recent operations, such as the takedown of the Nemesis online market, which was directly linked to fentanyl sales and subsequently faced sanctions from the U.S. Department of the Treasury’s Office of Foreign Assets Control.