Cryptocurrency prices have been plummeting, causing a ripple effect that is impacting both legitimate and dark web crypto exchanges. Security researchers have discovered that the decrease in crypto values is leading to a “bank run” scenario, where holders are trading their crypto for more stable currencies. This trend is putting pressure on exchanges to maintain liquidity and is hindering threat actors from funding their malicious activities.
Dov Lerner, the security research lead at Cybersixgill, revealed that the cryptocurrency market has lost a staggering $1.8 trillion in value since its peak in November of last year. This significant loss has forced some regular cryptocurrency exchanges to slow down withdrawals in order to manage their reserves. The impact is also being felt on dark web exchanges, which operate outside of regulated financial markets and do not require identity verification from their users.
Dark web exchanges serve as platforms for users to convert money from services like Revolut or PayPal into cryptocurrencies. Despite the lack of regulatory oversight, these exchanges have built trust through branding and marketing efforts. However, researchers at Cybersixgill have observed a decline in activity on dark web forums by actors operating crypto exchanges since the recent crash in cryptocurrency prices.
The decrease in crypto values has not only affected the reserves of dark web exchanges but has also diminished the purchasing power of threat actors. While transactions on the dark web are conducted in cryptocurrencies, the prices for goods and services are typically denominated in dollars. As a result, actors may be struggling to cover their costs as crypto values continue to decline.
Lerner predicts that the current slowdown in commerce on the dark web due to the loss of liquidity will likely be temporary. If cryptocurrency values rebound, dark web exchanges could see a resurgence in activity. In the meantime, the pressure caused by falling crypto prices is forcing both legitimate and dark web exchanges to adapt to the changing market conditions.