Nearly Half of the Darknet Drug Trading Happens in the EU, but the Scope of the Market Remains Insignificant

Recently the European Monitoring Center for Drugs and Drug Abuse (EMCDDA) published an extensive report about the darknet markets and their use in the drug trade. The report marks the EU as a center of the darknet drug trade – but considers its share out of all drug trafficking that takes place as insignificant. Nevertheless, the agency sees a chance to take it down before it becomes big.

A joint report of the EMCDDA and Europol, the major police authority of the EU, analyzes the drug trade on darknet markets in light of the latest findings of academics, law enforcement, and further empirical data.

A Convenient Sales Channel

The report recognizes the darknet markets as a new child in the town of drug trafficking and distribution. These markets are hosted on anonymous servers, can only be accessed with the TOR browser that enables anonymous internet browsing, and payments can only be made with bitcoin or other cryptocurrencies, most notably monero.

As the report points out, these markets have significant advantages for both sellers and vendors. Those advantages “can include the level of choice, ease of availability, convenience, perceived quality and price” and “relatively low risks of detection, experiencing market-related violence and ‘rip-offs.’” In short; “Darknet markets provide a convenient sales channel to technologically knowledgeable customers.”

Similarly, as e-commerce disrupted the markets for legitimate commodities, the report writes, darknet markets can disrupt traditional drug markets. However, this has not happened yet. “Compared with current estimates of the annual retail value of the overall EU drug market, sales volumes on darknet markets are currently modest.” But the sales are “significant and have the potential to grow.”

While the authorities collected a lot of information about the darknet markets, it remains unclear, if the traditional organized crime groups have started to use these markets for trafficking and distribution of drugs.

Darknet Drug Deals in the EU

Most of the report focuses on the use of darknet markets by dealers and users in the EU. To examine this snapshots of 16 major marketplaces during the period 22 November 2011 to 16 February 2015 have been analyzed.

The empirical data shows that the EU is a hotspot for darknet market drug activity. With 46 percent nearly half of the drug revenue made on these marketplaces have been made in EU countries. Interestingly only 34 percent of the weight sold is accounted to the EU. This can be explained by that cannabis, a drug which is relatively cheap per weight unit, is sold less in the EU than in other regions, maybe because it is nearly freely available in most EU countries.

The most popular drugs for European darknet market users are “non-cocaine stimulants” like ecstasy and other amphetamines, followed by cocaine and cannabis. Hallucinogens like magic mushrooms or LSD, and Opioids like heroin, play a minor role.

The country with the most volume is no surprise; it is Germany, the largest economy of the EU, with an overall volume of €26.6 million ($31.5m) in sales during the observed period. More surprisingly, Germany is followed by the UK with €20.3 million ($24m) and the Netherlands with €17.9 million ($21.2m). Other large European economies, like France and Italy, are nearly insignificant, while countries like Belgium (€4.7 million or $5.5m) and Croatia (€2.3 million or $2.7m) have remarkably high volumes…

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