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The global economy has been battered by shifting demand, supply chain woes, and businesses put on hold. Does the same hold true for the dark web economy?
Obviously underground markets don’t report sales, but if product feedback — comments left on items for sale — is any indication, we’ve seen a significant rise in transactions starting in January 2020 and peaking on March 23, 2020 before declining throughout April as social distancing restrictions began to lift around the world.
Trade in malware, phishing kits, and stolen credit cards and other online accounts remained steady over this period. The real driver of the surge was the underground drug market, which saw sustained and dramatic growth as a result of the new restrictions on the global economy.
Still, the underground drug economy experienced some of the same challenges as any other business, like delays in shipping and consumers hesitant to spend money under the threat of layoffs and furloughs.
Here’s a snapshot of the dark web economy during the pandemic.
Surge in supply spills over into the dark web
Over the past 12 months, the supply of malware, phishing kits, and stolen accounts has been more or less steady. The supply of drugs, however, begins a clear rise in the early months of 2020, growing 495% between December and April:
4,154 items for sale on December 23, 2019
22,445 items for sale on February 24, 2020
24,719 items for sale on April 27, 2020
This supply-side growth reflects a mass shift from street-level dealing to the digital underground as the pandemic emptied streets and public places.
Individual drugs grew at different rates:
Cannabis postings grew 555%, from 896 postings on December 23, 2020 to 5,874 on February 24, 2020, before a slight dip to 5,425 on April 27, 2020.
Cocaine postings jumped 1000%, from 140 on December 23 to 1,541 on April 27.
MDMA postings increased 224%, from 551 on December 23 to 1,786 on April 27.
Feedback, while an imperfect metric for purchase volume, is a reliable indicator of the rate of transactions. Feedback volume for cannabis, cocaine, and MDMA all nearly doubled over the past half year.
Dark web drug sales not immune to the economic freeze
The closure of public spaces during the COVID-19 pandemic sent consumers to the dark web for illegal drugs. Like all consumers, dark web shoppers may have been driven to online shopping due to fear of physical contact. One vendor advertising cannabis went so far as to note that they sterilize all packages with disinfectant and bleach prior to shipping.
As with all online shopping, shipping delays occurred, with dark web chatter suggesting that slower delivery times dinged the reputations of vendors among a cynical customer base that’s always vigilant for scammers. Though the rise in chatter and concerns was temporary, it did make both vendors and consumers more conscious of the risks of international shipping for illegal goods.
While supply surged, demand lagged and never caught up, rising later and at a slower pace. That led to a 10-fold surge in mentions of “bargains” and “discounts” in early 2020. That’s not only a response to oversupply, but a reaction to consumers’ precarious economic situation during the economic freeze.
The dark web as a microcosm of the broader economy
The COVID-19 pandemic has caused nearly wholesale damage to the economy, across industries and geographies. The global exodus of populations off the streets and into their homes had wide-ranging ramifications for the supply chains and business protocols of the illicit drug trade in particular.
The dynamics in the drug trade on the dark web mirrored those of legitimate online sectors. The same patterns of anxious consumers in an uncertain climate, supply chain disruptions, and shipping delays impacted supply, pricing, and customer service.
It also highlights the reliance of criminal networks on the internet, and the increasing need to put our ear to the internet’s underground.
For a full snapshot of the underground illicit drug economy during the pandemic, download our recent threat intelligence report.
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