“Major darknet markets come and go in eras,” I wrote back in April 2019, as several of the biggest online drug bazaars were shuttering. A wave of law enforcement actions followed shortly after. Wall Street Market and Valhalla, as well as coin mixing service Bestmixer.io and even darknet-focused news site DeepDotWeb were all shut down in recent months. Possibly feeling the heat, Dream Market disappeared, too.

While the dark web community fell into a brief state of turmoil around late April and early May, research by Wired, The New York Times and Bitcoin Magazine shows that a new generation of darknet markets is already filling the void left behind by their fallen competitors. Dark web news site and guide DarknetlLive lists over 30 active digital black markets that utilize the anonymizing Tor browser and bitcoin to allow users to buy and sell drugs and other illegal products anonymously online.

Indeed, perhaps unsurprisingly, market operators, vendors and sellers are all quickly shrugging off recent law enforcement actions to simply migrate to their next best option, with names like Empire Market, Nightmare Market and Berlusconi Market.

As concluded by The New York Times:

“That means the fight against online drug sales is starting to resemble the war on drugs in the physical world: There are raids. Sites are taken down; a few people are arrested. And after a while the trade and markets pop up somewhere else.”

THE ERAS OF DARKNET MARKETS

The closure of darknet markets, and subsequent growth of new and lower-tier markets, is starting to look a lot like a cycle on repeat every couple of years.

The first ever darknet market was, of course, Silk Road, launched by Ross Ulbricht in 2011. One of the first big use cases for bitcoin, Silk Road quickly turned into an internet phenomenon, until it was shut down by law enforcement in 2013. Ulbricht has since been convicted to a double life sentence plus 40 years in prison.

A second generation of darknet markets popped up almost immediately after Silk Road’s closure, however, with names including Silk Road 2.0, Cloud 9 and Hydra. These newer markets were quickly responsible for well over $250 million of yearly trading volume, according to blockchain analytics firm Chainalysis (Silk Road had never even reached $200 million). This first group of Silk Road successors was also shuttered by law enforcement, in late 2014, as part of an international crackdown called “Operation Onymous.”

In turn, marketplaces like Agora (which later closed shop voluntarily), AlphaBay and Hansa came to prominence throughout 2015 and 2016: a third generation. When AlphaBay was shut down in 2017, trading volume on the dark web had increased to over $700 million yearly, and AlphaBay in particular had become several times bigger than Silk Road ever was. Hansa was shutdown shortly after AlphaBay, just as many former AlphaBay users had been signing up to this alternative. The double-takedown, dubbed “Operation Bayonet,” was in part intended to discourage users from migrating yet again.

But it proved to little avail. Once again, demand to order drugs from the comfort of home remained, and sites like Dream Market, Wall Street Market and Valhalla grew to be a fourth generation of market leaders. According to Chainalysis, activity on these markets surpassed a yearly volume of $600 million in 2018.

Wall Street Market and Valhalla were closed down in recent months, and dozens of vendors were arrested as well. On top of that, coin mixing service Bestmixer.io and darknet-focused news site DeepDotWeb were shut down by law enforcement; both are suspected for money laundering. (DeepDotWeb earned millions of dollars worth of bitcoin through darknet market affiliate links.) Dream Market seized operations for unknown reasons.

DARKNET MARKETS DETERRENCE

The latest round of shutdowns and arrests resulted from a broad scale cooperation between law enforcement agencies across different jurisdictions. Wall Street Market was, for example, closed by German Federal Criminal Police under the authority of the German Public Prosecutor’s office, with support from the Dutch National Police, Europol, Eurojust and various U.S. government agencies including the DEA, FBI, IRS, Homeland Security Investigations, U.S. Postal Inspection Service and the U.S. Department of Justice.

Law enforcement agencies are also increasingly dedicating resources to counter darknet markets specifically. This includes the establishment of specialized teams, such as the Joint Criminal Opioid Darknet Enforcement team, or J-Code, which was created by the FBI in 2018 and brings together specialists from various agencies. Europol also has a dedicated dark web team.

Even if closing down all darknet markets for good may be an unattainable goal, according to The New York Times these agencies are trying to limit their growth as much as possible. This is not only realized by shuttering the markets where they can, but, for example, also spreading distrust on the dark web: Users are made to believe that market operators and sellers have been compromised and cooperate with law enforcement.

“After some years now of this cycle, it would be hard to say that it’s likely we’re going to stamp this out completely,” Richard Downing, who oversees the computer crime section of the U.S. Department of Justice, told The New York Times. “I am hopeful that our efforts to spread deterrence and mistrust are having an impact on how quickly they come back and how strongly they come back.”

Indeed, law enforcement actions may slow down the growth of darknet markets to some extent. The fourth generation (Dream Market, Wall Street Market, Valhalla) was already slightly smaller than the third (Agora, AlphaBay and Hansa) — though the difference was small and was shrinking. Similarly, Empire Market, Nightmare Market and Berlusconi Market are all still not as big as their predecessors were — for now.

THE FIFTH GENERATION OF DARKNET MARKETS

Still, mere weeks since the last law enforcement actions, the effects on dark web users appears limited. While DeepDotWeb was taken offline, DarknetLive is providing much of the same information, and Reddit-style forum Dread has established itself as a community hub for dark web-related discussion. Bestmixer.io was, of course, only one of many coin mixing solutions for Bitcoin to begin with, and several darknet markets are also accepting privacy coin Monero (XMR), which effectively “mixes” every transaction by default.

As far as product listings go, there is probably little that users won’t be able to buy now that they used to be able to. Empire Market, Nightmare Market and Berlusconi Market each list between 10,000 and 40,000 drug offers, as well as stolen credit card numbers, counterfeit goods and other black market products.

And, all in all, this fifth generation of darknet markets seems to be getting back to business even faster than some earlier generations did.“The instability has become sort of baked into the dark-web market experience,” Emily Wilson, an expert on the dark web at the security firm Terbium Labs, acknowledged in TheNew York Times. “People don’t get quite as scared by it as they did the first few times.”