Preliminary findings of the impact of COVID-19 on drugs crypto markets

By Andréanne Bergeron, David Décary-Hétua and Luca Giommoni

Background

The COVID-19 pandemic has had unprecedented consequences on the world economy. The impact of the pandemic on the illicit drug market remains scant. We expose the potential consequences the COVID-19 pandemic could have on the ability of people who use drugs to source their illicit drugs via cryptomarkets.

Methods

We analyzed 262 self-reported submissions of illicit drug transactions on the darkweb. The self-reports include the date of the transaction, the types of illicit drugs bought/sold, and whether the shipment of the illicit drugs succeeded, had issues (ex. unusually long delivery, an error in the type of drug shipped, quantity or concentration of the drug), or failed.

Results

Between January 1st, 2020 and March 21, 2020, successful deliveries represented 60% to 100% of transactions. Starting on March 21 however, the share of shipments that had issues or failed increased rapidly and represented a majority of all shipments. At the peak of the market disruption, the successful deliveries represented only 21% of all transactions.

Conclusion

Illicit drug transactions on the darkweb were disrupted at the same time as lockdowns were put in place in the United States and in the United Kingdom. While no causation link can be established, the correlation suggests that lockdowns could have disrupted drug cryptomarkets activities. We discuss the market disruption in light of the literature.