Category: Hydra

Categories
Crypto Exchange Crypto News Hydra Markets Russia

World’s Largest Darknet Market Gets Taken Down

A German/US joint operation has seen Hydra Market – the world’s largest darknet marketplace – shut down. At the same time, the US Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned wallets and a Russian cryptocurrency exchange known for money laundering.

The marketplace offered a variety of services, from allegedly arranging drug transactions to money laundering. OFAC sanctioned more than 100 cryptocurrency addresses related to Hydra, adding them to its Specially Designated Nationals and Blocked Persons (SDN) list.

Darknet market share of total market. Source: Chainalysis

The Russian-based Hydra Market has been the largest darknet market for the past few years, even though it only served Russian-speaking countries. In 2021, Hydra received more than US$1.7 billion worth of cryptocurrency, which accounts for over 75 percent of all darknet market revenue globally.

Money Laundering Staunched by Hydra’s Closure

In fact, since 2020, Hydra received US$645 million worth of cryptocurrency from illicit sources, including other darknet markets, wallets holding stolen funds, ransomware operators, and scammers. Chainalysis believes much of this was due to its widely used money-laundering services.

A vendor listing for a money-laundering service on Hydra.

Russian Crypto Exchange Goes Down With Hydra

Garantex is a sizeable crypto exchange based in Russia and, according to the Chainalysis 2022 Crime Report, is also the largest platform for money laundering in Moscow, having received more than US$10 million from known ransomware strains including NetWalker, Phoenix Cryptolocker, and Conti.

Following the closure of Hydra, OFAC has also sanctioned Garantex, which has been previously investigated for its money-laundering indiscretions.

Illicit Activity a Fraction of Total Transaction Volume

As it stands, illicit activity represents only a small portion of total transaction volume as adoption in the crypto space has soared. The level of criminality on the blockchain has lessened considerably, with illicit transactions accounting for a much smaller segment of the total.

Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to US$15.8 trillion in 2021, up 567 per cent on 2020’s totals. Given the massive increase in adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase in illicit transaction volume was nearly an order of magnitude lower than overall adoption shows that illicit activity may be in decline.

Categories
Blockchain Cardano Hydra Tokens

Cardano Exploring Token Burning Mechanism Similar to Ethereum

The latest roadmap status update from Cardano suggests the blockchain may be investigating adding some form of token burning functionality, a feature that was added to Ethereum last year as part of the London hard fork update.

The Cardano update, released on its website on March 18, was vague about what is planned in terms of token burning, simply saying it was an option under consideration by the Hydra Team:

Finally, they inspected the options of token minting and burning within a Hydra Head along with scenarios of using tokens instead of datums.

Cardano status update

Confusion About Token Burning

The mention of token burning in this update was taken by some in the crypto industry to signal that Cardano founder Charles Hoskinson had dropped his known, long-standing opposition to token burning on the blockchain:

However, close followers of Cardano emphasised that the update stated token minting and burning may be coming to the Cardano layer-2 scaling solution Hydra, not the main Cardano blockchain itself:

Hydra is a layer-2 scaling solution for Cardano currently under development. Matthias Benkort, a Cardano software engineer, describes it as “an off-chain mini-ledger between a restricted set of participants, which works similarly (albeit significantly quicker) to the on-chain main ledger”.

Token burning being restricted to Hydra implies that the overall supply of ADA, Cardano’s native token, won’t be reduced and therefore won’t cause upward price pressure for ADA investors.

Hoskinson Attempts to Clarify

Hoskinson himself weighed in on the debate, retweeting a suggestion that Cardano is exploring token burning on its main blockchain and adding a GIF of an exasperated-looking Jackie Chan to express his frustration with the confusion:

Across the broader crypto market, token burning functionality has been implemented on many blockchains as a deflationary mechanism in order to increase token price. Last year, Binance burnt over 1.3 million BNB, at the time valued at almost US$400 million, in one of its quarterly token burns.