The success rate of online illicit drug transactions during a global pandemic.

BACKGROUND AND AIMS: In the months following the onset of the COVID-19 pandemic, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA; 2020) observed an increased use of cryptomarkets, which led them to question whether cryptomarkets constituted a more convenient channel via which to distribute illicit drugs without any in-person contact. However, as more countries' borders closed, the likelihood is that cryptomarkets have been negatively impacted. We aim to measure and understand the success rate of transactions on cryptomarkets during the ongoing COVID-19 pandemic, through recourse to self-reported data that documents the outcome of cryptomarket transactions. METHODS: To collect self-reported data on cryptomarket transactions, we launched a platform where participants can enter information about their prior activities on cryptomarkets. The sample consists of 591 valid self-reports that were received between January 1st, 2020 and August 21st, 2020. RESULTS: The number of unsuccessful transactions increased concurrently with the global spread of the pandemic. Both the international and inter-continental nature of the transactions and the severity of the crisis in the vendor's country are significantly associated with delivery failure. CONCLUSIONS: Drug cryptomarkets may have been disrupted due to the pandemic. The results lead to two opposing explanations for unsuccessful transactions. One explanation for the lower success rate is the inability of drug dealers to deliver on past promises that were made in good faith, while the second points towards opportunistic and abusive behaviour by drug dealers.

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

BACKGROUND: The COVID-19 pandemic has had unprecedented consequences on the world economy. The impact of the pandemic on 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.

Nonmedical prescription psychiatric drug use and the darknet: A cryptomarket analysis.

BACKGROUND: Nonmedical prescription psychiatric drug use (NMPDU) is an increasing global health problem, with recent concern focusing on darknet cryptomarkets as sources of procurement. There is a shortage of evidence regarding comparative worldwide NMPDU trends, due in part to data collection difficulties. This problem is particularly marked for non-opioid drugs, particularly those psychiatric drugs which act on the central nervous system (CNS) and have high misuse potential and are associated with high levels of dependency and fatal overdose. This paper therefore has two goals: 1) to report on the kinds of psychiatric prescription drugs available on cryptomarkets, and 2) to use this data to uncover temporal and geographical trends in sales of these products, potentially informing policy regarding NMPDU more generally. METHOD: Digital trace data collected from 31 cryptomarkets in operation between September 2013 and July 2016 was analysed by country of origin descriptively and for trends in the sales for 7 psychiatric drug groupings, based on their main indication or intended use in psychiatric practice. RESULTS: Sedatives (such as diazepam and alprazolam) and CNS stimulants (mainly Adderall, modafinil and methylphenidate) had the greatest share of sales, but usage and trends varied by location. The UK has high and rising levels of sedative sales, whilst the USA has the greatest stimulant sales and increasing sedative rates. Sales of drugs used in the treatment of opioid dependency are also substantial in the USA. The picture is less clear in mainland Europe with high sales levels reported in unexpected Central and Northern European countries. There is evidence of a move towards the more potent sedative alprazolam - already implicated as a source of problematic NMPDU in the USA - in Australia and the UK. Sales of drugs such as antidepressants, antipsychotics, mood stabilisers and antidementia drugs - all drugs with limited abuse potential - were negligible, indicating minimal levels of online cryptomarket procurement for self-medicating mental health problems. CONCLUSION: Predominantly, psychiatric drugs with potent sedative, stimulant or euphoriant effects are sold on cryptomarkets and this varies by country. With some caveats regarding the limitations of cryptomarket digital trace data taken into account, the study of trends of these products sold online over time may offer a novel and increasingly important window onto wider drug purchasing habits.

Effect of restricting the legal supply of prescription opioids on buying through online illicit marketplaces: interrupted time series analysis.

OBJECTIVE: To examine the effect on the trade in opioids through online illicit markets ("cryptomarkets") of the US Drug Enforcement Administration's ruling in 2014 to reschedule hydrocodone combination products. DESIGN: Interrupted time series analysis. SETTING: 31 of the world's largest cryptomarkets operating from October 2013 to July 2016. MAIN OUTCOME MEASURES: The proportion of total transactions, advertised and active listings for prescription opioids, prescription sedatives, prescription steroids, prescription stimulants, and illicit opioids, and the composition of the prescription opioid market between the US and elsewhere. RESULTS: The sale of prescription opioids through US cryptomarkets increased after the schedule change, with no statistically significant changes in sales of prescription sedatives, prescription steroids, prescription stimulants, or illicit opioids. In July 2016 sales of opioids through US cryptomarkets represented 13.7% of all drug sales (95% confidence interval 11.5% to 16.0%) compared with a modelled estimate of 6.7% of all sales (3.7% to 9.6%) had the new schedule not been introduced. This corresponds to a 4 percentage point yearly increase in the amount of trade that prescription opioids represent in the US market, set against no corresponding changes for comparable products or for prescription opioids sold outside the US. This change was first observed for sales, and later observed for product availability. There was also a change in the composition of the prescription opioid market: fentanyl was the least purchased product during July to September 2014, then the second most frequently purchased by July 2016. CONCLUSIONS: The scheduling change in hydrocodone combination products coincided with a statistically significant, sustained increase in illicit trading of opioids through online US cryptomarkets. These changes were not observed for other drug groups or in other countries. A subsequent move was observed towards the purchase of more potent forms of prescription opioids, particularly oxycodone and fentanyl.

Assessing market competition and vendors' size and scope on AlphaBay.

BACKGROUND: Since 2011, drug market participants have traded illegal drugs through cryptomarkets, a user-friendly infrastructure in which drug market participants can conduct business transactions. This study assesses market competition and the size and scope of drug vendors' activities on one of the largest cryptomarkets, AlphaBay, in order to better understand the challenges that drug vendors face when selling on this venue. METHODS: Relying on data collected from AlphaBay, we calculate the degree of competition within the drug market using the Herfindhal-Hirshmann Index (HHI). We then follow a micro analytical approach and assess the size and scope of vendors' accounts. This is done by evaluating each vendor's market share over time using a group-based trajectory model (GBTM). Results from the GBTM are then used to assess vendors' exposure, diversity and experience based on their selling position in the market. RESULTS: The HHI scores demonstrate that cryptomarkets offer a highly competitive environment that fits in a top-heavy market structure. However, the distribution of vendors' market share trajectories shows that only a small portion of vendors (referred to as high-level vendors) succeed in generating regular sales, whereas the majority of vendors are relegated to being mere market spectators with almost zero sales. This inequality is exacerbated by the aggressive advertising of high-level vendors who post many listings. Overall, product diversity and experience is limited for all market participants regardless of their level of success. We interpret these results through Reuter's work on traditional illegal markets, e-commerce studies and the growing field of cryptomarket research. CONCLUSION: We conclude that, while offering a new venue for illegal drug transactions, in many ways, the economics of cryptomarkets for drug dealing are consistent with Reuter's classic assessment of illegal markets and the consequences of product illegality that underlie it. Cryptomarkets conflicting features, a relatively open setting with relatively high barriers to entry and sales, shape the competitive, yet top-heavy market that emerges from our analysis. This creates a challenging environment for cryptomarket drug dealers.

An island apart? Risks and prices in the Australian cryptomarket drug trade.

BACKGROUND: Australia has a reputation as an anomaly with regard to cryptomarket drug trading, with seemingly disproportionately high levels of activity given its relatively small size, high prices and anecdotal accounts of it being a destination where many foreign-based vendors will not sell. This paper aims to investigate these claims from a risk and prices perspective. METHODS: By analysing data for over 60,000 drug products available for purchase from eight cryptomarkets in January 2016 this work builds a descriptive picture of the Australian online market in comparison to the rest of the world, before moving onto analyse the prices of drugs available to Australian consumers, both online and though conventional drug supply routes. RESULTS: Results show that the Australian online illicit drugs market is of considerable size, internally isolated and with methamphetamine sales being particularly large by comparison to other countries. Australian cryptomarket vendors sell drugs at significantly higher prices than those listed by their foreign counterparts. Online prices are however broadly comparable to street prices, with the exception of methamphetamine where prices appear to be much lower online. CONCLUSIONS: These findings indicate that the perceived stringency of Australian border protection inadvertently increases the competitiveness and local market share of domestic cryptomarket vendors via a consumer side 'risk tariff', challenging the traditionally vendor-oriented drugs risk and prices framework.

Going international? Risk taking by cryptomarket drug vendors.

BACKGROUND: Since 2011, we have witnessed the rise of 'dark net' drug marketplaces known as cryptomarkets. Cryptomarkets operate on the same model as eBay as they provide a platform where authorized vendors can set up a virtual shop and place listings. Building on a growing body of literature that seeks to understand cryptomarket participants, this paper seeks to explain the decision of cryptomarket vendors to take on risk. METHODS: We collected data on Silk Road 1 (SR1), the first cryptomarket launched in 2011. We propose a multilevel model that takes into account the characteristics of listings, vendors and their environment to explain the decision of vendors to take on risk. RESULTS: Our results demonstrate that all levels in the model significantly explain the decision to take on risk. Risk taking, operationalized as a willingness to ship drugs across international borders, was associated with the weights of drug packages mailed, the vendors' reputations and numbers of listings, the country-level perceived effectiveness of law enforcement according to experts, and the opportunities available to vendors as measured by the wealth and the drug expenditures of potential customers. CONCLUSIONS: Our results support some previous research findings on the factors explaining risk taking. We extend existing literature by emphasizing the relevance of the environment of drug dealers to predict risk taking.

Hidden wholesale: The drug diffusing capacity of online drug cryptomarkets.

BACKGROUND: In spite of globalizing processes 'offline' retail drug markets remain localized and - in recent decades - typically 'closed', in which dealers sell primarily to known customers. We characterize drug cryptomarkets as 'anonymous open' marketplaces that allow the diffusion of drugs across locales. Where cryptomarket customers make stock-sourcing purchases for offline distribution, the cryptomarket may indirectly serve drug users who are not themselves cryptomarket customers, thereby increasing the drug diffusing capacity of these marketplaces. Our research aimed to identify wholesale activity on the first major cryptomarket, Silk Road 1. METHODS: Data were collected 13-15 September 2013. A bespoke web crawler downloaded content from the first major drug cryptomarket, Silk Road 1. This generated data on 1031 vendors and 10,927 drug listings. We estimated monthly revenues to ascertain the relative importance of wholesale priced listings. RESULTS: Wholesale-level revenue generation (sales for listings priced over USD $1000.00) accounted for about a quarter of the revenue generation on SR1 overall. Ecstasy-type drugs dominated wholesale activity on this marketplace, but we also identified substantial wholesale transactions for benzodiazepines and prescription stimulants. Less important, but still generating wholesale revenue, were cocaine, methamphetamine and heroin. Although vendors on the marketplace were located in 41 countries, wholesale activity was confined to only a quarter of these, with China, the Netherlands, Canada and Belgium prominent. CONCLUSIONS: The cryptomarket may function in part as a virtual broker, linking wholesalers with offline retail-level distributors. For drugs like ecstasy, these marketplaces may link vendors in producer countries directly with retail level suppliers. Wholesale activity on cryptomarkets may serve to increase the diffusion of new drugs - and wider range of drugs - in offline drug markets, thereby indirectly serving drug users who are not cryptomarket customers themselves. Cryptomarkets provide researchers and policy makers with a rich source of drug monitoring information. Further research should ascertain whether their virtual location may reduce the violence associated with middle market drug activity. We caution that conflict may instead manifest in other ways, including threats, fraud, and blackmail.