The challenges with accessibility and liquidity of privacy cryptocurrencies have drawn darknet users back to Bitcoin, despite regulatory pressure.
Withdrawal of Privacy-Focused Cryptocurrencies
At its peak, Monero was the preferred choice in the darknet market due to its high level of privacy. However, regulatory pressures forced major cryptocurrency exchanges to delist privacy-oriented coins like Monero. Platforms such as Binance and OKX severely hindered users’ access to these cryptocurrencies. Consequently, darknet users began gravitating towards Bitcoin, which offers greater accessibility and liquidity.
Increasing Transparency and Regulatory Pressure
On-chain data shows the proportion of crime-related transactions within the cryptocurrency space remains low at just 0.14%, according to Chainalysis. Nonetheless, regulators continue to scrutinize darknet activities. Recent enforcement actions against synthetic drug trafficking have included sanctions on Nemesis platform wallets. Such measures underscore the tracking capabilities of more transparent cryptocurrencies like Bitcoin for both users and regulators.
Change in Darknet User Preferences
This shift in user preferences is influenced by both technical reasons and ease of access, as well as necessary adaptation due to regulatory pressure. The inaccessibility of privacy-focused cryptocurrencies like Monero inadvertently guides users to more transparent alternatives such as Bitcoin.
With tightened regulatory scrutiny and the delisting of privacy coins from exchanges, darknet users are turning to Bitcoin for its accessibility and high liquidity, despite the low share of criminal transactions in the cryptocurrency space.
