Report background and context
Developments in information technology are transforming many aspects of modern life and this includes the way that illicit goods are traded. This report focuses on online anonymous markets (or ‘cryptomarkets’). Such markets are a relatively recent development that enables sellers and buyers to transact online without disclosing any personal details, hence creating a considerable degree of anonymity. This development has led to the proliferation of the trade in illicit goods online, and it is now recognised as a growth area for the activities of organised crime in the European Union (EU) that is undermining conventional law enforcement approaches. It is estimated that about two thirds of the offers on darknet markets are drug related, with the remainder related to a range of other illicit goods and services. However, any analysis has to be made with caution because of not only the difficulties inherent in monitoring developments but also simply the pace of change in this extremely dynamic area. Europol’s 2017 European Union Serious and Organised Crime Threat Assessment (EU SOCTA) identified the online trade in illicit goods and services as one of the engines of organised crime. An improved intelligence picture and a coordinated law enforcement approach across the EU in addressing criminality on the darknet are now at the heart of the EU Policy Cycle for organised and serious international crime (2018-2021). This has been reflected in law enforcement approaches, as illustrated by two recent significant coordinated international law enforcement operations on two of the largest darknet markets.
Structure of the report
This report has three main chapters. The first reviews the key concepts necessary to understand the development of darknet markets. The second chapter highlights the growing importance of this area for drug sales within the EU through the presentation of an analysis of market activity. This includes an analysis of drug supply on global darknet markets (2011-2015). The analysis focuses on drug supply originating from the EU, and includes an assessment of the relative significance of EU suppliers in both the global darknet drug trade and the overall European retail drug market. This second chapter then also considers non-English language darknet markets for specific European countries, before providing an analysis focused on AlphaBay — one of the largest markets to have existed thus far — from its original emergence to its recent closure (2015-2017). In the third chapter, the darknet phenomenon is reviewed from a law-enforcement perspective. Not only are the challenges for law enforcement elaborated, but examples of successful recent actions are also provided, which are useful for informing discussions on future interventions in this area. Taken together, this analysis provides a comprehensive but accessible policy-orientated review, intended to facilitate discussions at EU level on how to respond to the growth of darknet drug markets. This is accompanied by the identification of key priority areas that require attention and where activities are likely to have most impact. When interpreting the findings from any analysis of this topic, the considerable difficulties of collecting data on an area of activity that is, by definition, designed to remain hidden needs to be borne in mind. Notwithstanding this, some key findings and recommendations for action emerge from this report.