Drug dealing increasingly complex
Darknet markets — also known as cryptomarkets — provide a largely anonymous platform for trading in a range of illicit goods and services. It is estimated that around two thirds of the offers on darknet markets are drug-related. Drug sales on these markets, although modest when compared to the overall retail drug market, are significant and appear to be expanding. EU-based suppliers are important players in the darknet ecosystem, accounting for some 46% (around EUR 80 million) of all drug sales globally, on the 16 major darknet markets analysed in the period 2011–15.
A number of potential threats posed by the darknet are identified in the report, including the development of decentralised networks — allowing marketplaces to exist on multiple servers — and new parcel delivery and collection systems.
A proliferation of darknet markets
The EMCDDA has produced an excellent 1 minute video (below) which shows that although there has been a significant proliferation of darknet markets, most are quickly closed down.
From their analysis of these markets, the EMCDDA and EUROPOL made the following key findings:
- The trade in illicit drugs on darknet markets is a dynamic area subject to rapid change as marketplaces appear and disappear. Overall, the importance of this area seems to be expanding and it now affects most EU Member States in some way.
- When compared with current estimates of the annual retail value of the overall EU drug market, sales volumes on darknet markets are currently modest, but are significant and have the potential to grow.
- EU-based suppliers are important players in the darknet ecosystem. In the 2011-2015 period, they accounted for around 46 % of all drug sales in terms of revenue on the darknet markets analysed.
- Between 2015 and 2017 on AlphaBay, which, at the time, was the largest darknet marketplace, EU-based suppliers accounted for around 28 % of all drug sales.
- In both study periods Germany, the Netherlands and the United Kingdom were the most important countries with respect to EU-based darknet drug supply. Stimulant drugs represented the majority of all European drug sales.
- The highest market activity in terms of number of transactions was observed at the retail level, and retail sales values were greatest for cannabis and cocaine. The picture was different for MDMA and opioids, however, where mid-level sales represented a relatively large proportion of all sales (although still less in absolute terms), and the value of the mid-level sales was greater than the value of the retail sales. This suggests that darknet markets may play a different role in the supply chain for these substances.
- Law enforcement interventions in the form of darknet market takedowns disrupt darknet markets, although the overall ecosystem appears to be fairly resilient with new markets quickly becoming established.
The two agencies have also provided a similar useful briefing on the use of cryptocurrencies such as bitcoin as a way of preserving the anonymity of transactions on darknnet markets:
Conclusions and recommendations
The report presents conclusions and recommendations in three groupings: law enforcement; monitoring and research and policy development. It does, however, also include a note of caution that the pace of change is rapid and the advice is likely to need regular review.
- In order to prevent the displacement of activities to new or other existing marketplaces, authorities need to pursue a multi-agency approach to target the latter. In addition to targeting individual marketplaces, this implies the need to prioritise other high-level threats and/or targets (major vendors or their suppliers), engage with industry and develop other measures.
- Since a small number of vendors appear to be responsible for a disproportionately large volume of overall sales, specialist law enforcement tactics should prioritise investigations that will have the largest impact. Identifying the origin of drugs sold on the darknet market is important for both targeting law enforcement efforts and a better understanding of overall market dynamics.
- The success of law enforcement operations against cyber-enabled crime often depends on the cooperation of technology industry actors. In this context, there is a need for standardised rules of engagement with private industry and the development of flexible cooperation models that can allow effective action while striking an appropriate balance between the interests of individuals, the general public and businesses concerned.
Research and monitoring
- Existing early warning approaches may be limited to detecting changes in drug consumption once they have already been established. This can be improved by supplementing such systems with data and information on darknet drug market sales.
- There is evidence that drugs bought on the darknet are likely to be intended for redistribution or supply on local markets. Further investigation should be conducted into the destination of drugs bought on the darknet.
- Research is needed to explore the interaction between traditional drug markets and darknet drug markets. This should include consideration of how consumers view these different marketplaces and their relative impacts on health risks and harm.
- The dynamic nature of online markets, their ability to evolve to respond to threats and exploit new opportunities, and the introduction or adoption of new technologies mean that enhanced monitoring capacity in this area is crucial to ensure that responses keep pace with new developments.
- In the light of the relative ease and convenience of the darknet as a sales channel, it is essential that measures are considered to prevent and discourage consumers from using online platforms for obtaining drugs.
- Engagement with key industries, such as the information technology, social media, payment services, and commercial product distribution and collection industries, is likely to be increasingly important for both identifying new threats in this area and developing effective responses.
- Engagement with the private sector and the research community is also likely to be increasingly important as a means of leveraging the expertise held outside the remit of law enforcement to identify new threats and combat the existing ones.
Blog posts in the drug and alcohol category are kindly sponsored by Breaking Free Group which has developed a powerful and adaptable digital health platform which targets the underlying psychological and lifestyle factors that drive addictive behaviours. Breaking Free has no editorial influence on the contents of this site.