Online Drug Markets Are Entering a 'Golden Age'

Darknet drug markets are thriving despite the coronavirus lockdown, with sales up, delivery times faster than Amazon and more robust defences against hackers, according to analysis by VICE News.

As the routines and restrictions of the working day receded for millions on lockdown, buying drugs online has never been so popular, research shows. What's more, as Covid-19 restrictions lift, these markets - which deliver drugs to millions of people worldwide every day - are emerging from a tough few years with their immune systems boosted, thanks to a combination of technical innovation, collaboration between competitors and sheer good fortune.

"Darknet drug markets are in a golden age," says darknet researcher Dark.Fail. "People worldwide have been stuck at home exploring Tor [an internet browser used to access markets privately] and buying drugs. In January, the markets were hard to access, as they were under permanent attack from hackers. Now, they are operating quicker than ever before."

Analysis by VICE News, EU agencies and tech firms reveal that, boosted by coronavirus panic buying, online sales of cannabis, MDMA, cocaine and mephedrone are all flourishing at, or above, prior averages. On the most popular global market, Empire, where many retailers offered lockdown deals, business has been especially brisk, with thousands of positive reviews about drug quality and speed of delivery.

SALES AND TURNOVER HAVE BOTH INCREASED

In May, the EU's drugs agency, the EMCDDA, reported that Cannazon - a cannabis-only online market - sold 1.6 tonnes of weed, worth 5.2 million [$5.9 million], up 27 percent in volume between January and March.

Sales are hard to measure with certainty on darknet markets, but by checking customer feedback with specialist software it is possible to estimate trends. Several of the UK's biggest online drug vendors have maintained positive feedback on around 1,000 to 2,000 sales monthly since January. That figure is broadly in line with their average number of sales. There was an increase in larger-value orders, coronavirus-themed deals, and cut-price custom deals, normally given to valued offline resellers.

Israeli tech firm Sixgill, which studied Empire from January until late March, documented a tripling in purchases as measured by customer feedback, from 97,616 reviews on December 23, 2019, to 311,157 per day by March 23, 2020.

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Vendors in the UK have reported little to no interruption in drug supply, except for quality hashish, which has been unavailable since mid-March.

Lockdown prompted some drug buyers to buy online for the first time, not so much out of necessity, but because of curiosity and opportunism. For example, Tony, 25, a restaurant delivery driver from London who was furloughed in April, explained over Signal: "I had free time. I'd microdosed with mushrooms a few times, and I loved it. A long time ago, in Thailand, me and my best friend did proper mushroom trips. I called him up in lockdown to catch up and he taught me how to use the dark web. The mushrooms turned up a few days later to my house. It looked like a fat letter. It was 48 for four grams. I'm getting some acid next. Or 2C-B, which I've never had."

Major UK-based online drug vendors told VICE News that turnover had increased by around 25 percent over the three-month UK lockdown through March, April and May. This came with a rash of orders from apparent newcomers with no knowledge of essential darkweb software such as PGP encryption. The newbies had plenty of drugs to choose from. In June, 2019, Empire listed over 28,000 drug offers. As of June this year, there are 30 percent more, with 36,000 deals listed.

DESPITE TRADE ROUTES BEING HIT, CUSTOMERS ARE STILL RECEIVING THEIR ORDERS

This market growth spurt was surprising. As two drug smugglers explained to VICE News, the fear was that lockdowns and tighter borders would make all drug imports riskier, meaning drugs would be in short supply.

Darknet drug markets - and the global supply chain that provides them with the goods to sell - depend on drugs imported from China. In February and March, many factories across China closed, among them chemical supply firms.

What's more, smugglers depend on commercial trade routes for cover. Although EU borders did not close to trade, shipping was hit, with capacity worldwide falling by 20 percent during lockdown, to lower than at any time in the last decade. If fewer ships and precursors arrived, then it seemed obvious that fewer drugs would be made and sold.

But it didn't quite turn out that way. While lockdown did have an impact on global drug supply and prices, whether it affected Mexican cartels or Spice users in Manchester, it has not been enough to make any serious dent in drug sales, either on the street or online.

MDMA prices, on and offline, are often a good indicator of supply-chain status. In most of the UK, 1kg prices for the drug have risen to around 2,000 a kilo, up from an average of 1,500 in January 2019. This rise may or may not be an artificial one. Buyers have accused suppliers of price-gouging, while smugglers rightly demand higher fees for the increased risks they are taking by crossing quiet, watchful borders.

In May, the EMCDDA reported that drug supplies had stayed steady across the continent, and that the market remained profitable. "The pandemic has had a major impact on our lives and is slowing down our economy," Europol chief Catherine De Bolle said in the EMCDDA's latest joint report on the drug market. "However ... these illegal markets continue to generate huge profits.... Seizures of illegal drugs in some EU countries during the first half of 2020 have been higher than in the same months of previous years," she wrote.

DELIVERY SPEEDS WERE AFFECTED, BUT ARE RETURNING TO PRE-LOCKDOWN LEVELS

At the height of lockdown, mail-sorting offices were over-run, short-staffed and swamped with millions of extra parcels as online sales boomed. This had a knock-on effect on the darknet drug trade, which relies on postal deliveries to keep business moving.

"The dynamics in the drug trade on the dark web mirrored those of legitimate online sectors," said Sixgill's report. "The same patterns of anxious consumers in an uncertain climate, supply-chain disruptions, and shipping delays [initially] impacted supply, pricing, and customer service."

At the end of March, even Amazon Prime's premium next-day delivery service was experiencing delays, while British supermarkets such as Asda and Tesco were operating with a three-week delay for home deliveries. After a few weeks of darknet vendor fear, caution and postal delays - which led to dozens of negative reviews, with deliveries that used to take a day now taking a week - normal service resumed. By early April, the darknet marketplaces were beating these retail giants' delivery speed.

Still, the dangers posed by an increase of deliveries were too much for some. "I'm not putting our staff at risk," one large UK vendor wrote in March. "We're going into vacation mode for a bit." Most vendors tweaked their systems, introducing a new minimum-spend level of 50 and a reduced postal service to decrease workload. "Dispute requests" - complaints lodged by unhappy customers to online market admins - soared, said Dark.Fail, and were left unanswered for up to five days.

"Delivery times were so long at the start," one darknet user, Rudi, told VICE News. "But soon, things got back to normal."

Longer delays hit customers from more isolated parts of the world, and still do. One customer from Sydney, Australia, who identified himself as "DE", said: "I've been waiting on some 2C-B from the UK for months." Another Australian user, who ordered mephedrone from Europe, said it finally landed after 12 weeks.

Many users extended escrow to allow for late deliveries, and one crew went so far as to refund users - to the last satoshi [the smallest unit of a bitcoin] - when packs did not arrive. After all, darknet markets are remarkably self-regulating systems, based on anarchist principles.

Now, confirms an admin at Darknet Live, a darknet news site, "Delays have subsided and users expect quick service." VICE News documented thousands of feedback reviews throughout lockdown, and by the start of April - just over two weeks into the UK lockdown - the phrases "NDD" (next-day delivery) or "2DD" (two-day delivery) once more became commonplace on all major online drug vendors' stores.

In the UK, vendors have been helped, unintentionally, by the Royal Mail. The firm has been on a major recruiting drive for casual mail-sorting staff, leading to increased delivery capacity and delivery speed, helping darknet markets make millions.

DARKNET MARKETS ARE OVERCOMING THREATS POSED BY HACKERS

Over 2020, technical innovation and new commercial partnerships between competitors have meant many darknet markets are emerging from the virus stronger than ever. This spring, multiple darknet markets united to end months of hacker attacks that started in January. This has led to record levels of uptime at Empire, which is now accessible for 95 percent of each day, compared to 70 percent in January, according to users. Essential darknet resources, such as community forums for vendor reviews or specialist search engines, have been rebuilt from the ground after police seized them. Today, these services allow users to search for any drug, sold by any vendor on any market, enabling trade to flow more freely.

Darknet market owners and vendors joined Dread, a dark net discussion board, to create and deploy a new software shield called "Endgame", which is now protecting ten markets from attack. Endgame is a new CAPTCHA-like system that appears before log-in pages are served. "As soon as Empire implemented Endgame, they announced five URLs," says Dark.Fail. Before this, the site was mirrored on 30 URLs. "Not one of Empire's five new URLs has gone offline for more than an hour since the Endgame launch. It works."

A Dread user named Paris announced the new software on Dread in May. "This is a major step forward for the darknet," they said. "As a united front, we will reach heights never seen before."

New darknet market support sites were built and launched, such as drug-specific search engine Kilos, and Recon, a search engine and vendor-reputation service. These replace the Grams site, which was seized in 2017.

Patrick Shortis, a criminologist at the University of Manchester specialising in darknet markets, said these services will stabilise the illegal ecosystem. "Customers can search multiple markets for an item, and verify vendor IDs on Recon. They also provide historical, reputational protection to vendors when markets go down."

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A new, technically advanced market called White House has also been launched, gaining 10,000 listings, 100,000 users and many trusted vendors. It features a compulsory Bitcoin-Monero converter at checkout, allowing vendors to be paid in Monero, a more anonymous cryptocurrency. Furthermore, a new kind of market, named Monopoly, was launched in January, enabling wallet-less, account-less transactions. Vendors are paid direct by customers, protecting users' funds from hackers or exit scams. Escrow has now been introduced.

The Russia-only market Hydra is also expanding, creating a new global drug bazaar called Eternos, which is launching in September. Hydra admins announced that the new market would feature IronRat, an artificial intelligence software agent for automated dispute resolution, making the sites even more user-friendly.

As lockdowns begin to lift globally, these markets have emerged from the chaos of the last few months with even greater immunity to dangers. "Darknet users find ways to adapt to instability. Ultimately threats drive innovation in cryptomarkets," said Shortis.

The biggest problem for markets today, then, is price gouging from suppliers. One darknet market admin said that LSD prices in Holland are surging, and that MDMA looked likely to follow - even though precursors and supplies are holding solid. "LSD prices have gone up for sure, also the dosage has gone down," says EE, a Dutch online vendor. "We have four suppliers, all heavily under-dosed. Ketamine is now almost impossible to source."

This is likely because most ketamine arrives in the EU on container ships to Rotterdam from India and China, where the drug is diverted from legitimate pharmaceutical facilities.

The drug trade, both real and digital, is not only recession-proof but liable to bloom in times of economic growth. We now have decades of evidence showing how drug markets will keep on going, whatever the economic or political weather. And while many governments have floundered and faltered, the online drug trade has come out fighting.