Monero (XMR): What’s New With the Dark Web Darling

Monero (XMR), the once favorite privacy coin of the darknet, has disappeared from the main pages over the past years. Despite that, XMR still sits among the 30 most valuable cryptocurrencies and is favored by those who prefer untraceable transfers. 

DailyCoin looked to various parameters and darknet marketplaces to check whether there is still a demand for Monero and its status today. 

Survived Winter Better than Crypto Market

Monero (XMR) is a privacy-focused cryptocurrency that offers fully anonymous and virtually untraceable transactions. Unlike Bitcoin or other decentralized cryptos, it uses enhanced privacy features that hide participants’ public wallet addresses and payment amounts.

These unique features made XMR the favorite coin of dark web black markets in 2016. Monero multiplied its value by almost 2700% and outpaced all other decentralized currencies.

The story repeated in 2020 and 2021 when Monero increased by 242.7% and 83.3%, respectively, and spiked again to $483.7 in May 2021.

Source: World Coin Index

Last year was hard for the financial markets due to increased energy prices, rising inflation, and a threatening global economic slowdown. The cryptocurrency market declined by 64.5% from $2.3 trillion to $828.7 billion by January 1, 2023. 

Monero’s (XMR) price dropped by 40.6% over the calendar year, showing higher resistance than Bitcoin’s (BTC), which lost 65% of its value over the same period. 

Source: CoinMarketCap

Volumes on Exchanges Declined

Monero trading volumes have gradually declined since the historically active 2021. As seen on the charts that track the activity on crypto exchanges, daily trading volumes of XMR hardly surpassed $200 million by the end of 2021 and during 2022.

At the same time, regulatory oversight tightened around privacy coins. Governmental authorities suspected that Monero (XMR) and other privacy-centered cryptos were used for money laundering, tax evasion, and other criminal activities.

Source: TradingView

Coinbase, Kraken, Huobi, and Bittrex delisted Monero fully or for separate jurisdictions that applied stricter regulations against XMR. Since then, Binance, KuCoin, and Crypto.com have been the biggest centralized exchanges supporting Monero and witnessing XMR trades against Tether (USDT) and Bitcoin (BTC) mostly.

The official numbers of XMR trading volumes declined. Meanwhile, the anonymous team behind Monero reported growth in XMR transfers in 2022. As stated on the project’s website, daily Monero transactions increased by 73%, from 23K to 40K daily.

In addition to that, malicious XMR mining intensified in 2022. According to the Kaspersky cybersecurity firm, more than 153,000 new illegal crypto malware cases were spotted last year. Nearly half (48%) of them were secretly mining Monero.

Source: SecureList

More Attention on Social Media 

At the same time, the interest in XMR has returned to social media, where Monero has one of the biggest communities. 

As data from LunarCrush shows, Monero-related online activity intensified over the past year. On most popular social media channels, Monero was mentioned 143% more often in 2022 than the previous year, says social intelligence platform.

The number of people talking about Monero increased by 234%, respectively, while interactions across XRM social posts expanded more than five times (574%) to 1.6 billion cases last year. 

Enhanced Privacy Features

2022 also marked one of the biggest steps in Monero’s development. The decentralized privacy coin completed its long-awaited hard fork last August, boosting XMR’s privacy and anonymity features.

As an anonymity-enhanced cryptocurrency (AEC), Monero uses advanced features to obscure transactions and prevent parties from being identified. Features like ring signatures and stealth addresses make it extremely difficult to track the source and destination of XMR funds.

After the protocol upgrade, Monero increased the base anonymity set, reduced the transaction size, and improved verification performance, making transactions lighter and faster.

Second Favorite on Darknet’s Marketplaces

Monero allows shady actors to remain elusive more easily than public and traceable coins like Bitcoin. For years it has been a favored payment method of the dark web and for other illicit purposes.

In 2022 illicit transaction volume rose for the second consecutive year, reaching $20.6 billion in total, said Chainalysis in its 2023 Crypto Crime Report.

A major portion (43%) of all illicit volume came from activity associated with entities sanctioned after Russia invaded Ukraine on February 24, 2022.

Meanwhile, ransomware and darknet market sectors saw declining value received. A few years ago, both were tightly related to high XMR usage.

Source: Chainalysis

Criminal groups prioritized Monero as a payment method for ransomware attacks in 2021. At least 22 ransomware groups were reported to accept XMR only, and seven more dealt with Bitcoin and Monero. 

Last year the situation drastically changed as more than half (59%) of victims refused to pay the ransom. “Total ransomware revenue fell from $765.6 million in 2021 to at least $456.8 million in 2022,” reported Chainalysis.

Source: CipherTrace

Following the general downturn in cryptocurrency markets, illicit revenue dropped on dark web marketplaces. The numbers declined from $ 3.1 billion in 2021 to $1.5 billion in 2022.

Major darknet marketplaces like Hydra were shut down, and new ones emerged, with Bitcoin and Monero remaining the preferred currencies for trading on the dark web.

Two out of three dominant darknet marketplaces that benefitted the most after Hydras’s collapse still prefer Bitcoin over Monero. Only the biggest accept payments in Bitcoin, Monero, and Tether.

Bitcoin and Monero payments are more often accepted on smaller darknet marketplaces. However, as their revenue volumes stay relatively low, according to Chainalysis’ data, Bitcoin seems to be the most influential cryptocurrency on the darknet marketplaces at the time of publishing.

Closing Thoughts

2022 was an extreme year for digital currencies, featuring historic collapses of algorithmic stablecoins, crypto lenders, and crypto empires. The regulatory scrutiny on digital assets intensified.

Privacy-centered projects also received unprecedented attention from the authorities. The US Treasury Department sanctioned the cryptocurrency mixer Tornado Cash for laundering billions of dollars.

Monero (XMR) and other privacy coins seem to be under pressure. At the same time, they are still a part of the darknet ecosystem, which acts on its own rules and cares little for legal regulations.

Learn more about privacy coins:
Privacy Coins: What Are They and Why Should You Be Concerned?

Find out more on crypto-related crimes:
Web3 Crime Trends: What Is the Hottest Target?