Elliptic analysts have discovered a new way to cash out BTC on the Hydra darknet market. The treasure with fiat money is buried underground in a certain place, where the buyer takes it.
In the largest darknet market, Hydra, a new way of exchanging cryptocurrencies for fiat money has emerged, according to a new study by analytical company Elliptic. The treasure with money is buried in a certain place where the customer of the service finds it. This same method has long been used to sell illegal substances.
According to the description of one of such services on Hydra, in exchange for a payment in cryptocurrency, the seller buries physical money in a vacuum package “5-20 cm underground.” The exact GPS coordinates are communicated to the buyer, who can unearth the “treasure”. The service fee is high – about 7% of the exchanged amount. According to analysts, this is a risky method – thieves, known as “seekers”, sometimes chase customers digging for treasure and steal packages.
“This is an interesting cash-out method that people are starting to use,” Elliptic CEO Tom Robinson said in an interview. “It’s hard to scale and requires you to be in Russia, but that’s where a lot of Hydra users are based.”
In the early years of the cryptocurrency market, when many exchanges did not identify clients, and blockchain analytics tools were just beginning to appear, cashing out the proceeds of crime in cryptocurrency was a fairly simple task. With increasingly stringent AML regulations from regulators and the ability to track transactions, things have changed, Robinson notes.
According to Elliptic, there are several options for withdrawing cryptocurrencies through Hydra. In exchange for a payment in BTC, users offer to top up their account with a prepaid debit card, while others offer to send rubles to an electronic wallet or to a bank account.
At the moment, Hydra is the largest darknet marketplace that has ever existed, where transactions are carried out in the amount of about $ 125 million per week. Recall that last spring, Russian Interior Ministry officials identified scammers who managed to sell fake bills of 1 billion rubles for cryptocurrencies on the darknet through Hydra.
As noted by Patrick Shortis, an expert on darknet markets at the University of Manchester, Russian darknet sites are focused on innovation.
“The Russian darknet markets differ from their Western counterparts in that the postal service in Russia is not as reliable, and therefore the cache method is preferred,” Shortis said in an interview. “Also, in the West we use PGP more often, we are more interested in cleaning our coins, using Monero and the like. In Russia, people are usually more relaxed when it comes to the threat from the state. ”
According to a study published in 2020 by Chainalysis, Eastern Europe is leading in the use of darknet platforms, and the Hydra marketplace is among the largest cryptocurrency services in the region.
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