• December 2, 2020

Drug dealers move to the streets when dark web markets get shut down

Shutdowns of illegal markets on the dark web lead to more drug trade in the streets. Illicit drug trade crimes for heroin, crack cocaine, and marijuana increased by 5% to 10% in the US during the two weeks after dark web markets shutdowns.

If you believed that your nerdy classmate could never become a drug lord, you might need to change your thoughts. According to the Global Drug Survey, online trade in illegal drugs has boomed during the past ten years, with the percent of drug users purchasing drugs online doubling from 2014 to 2017 in the US – from 7 to 14 percent. Trading illegal drugs online thrived thanks to cryptocurrencies and the dark web increase, a hidden portion of the web where illegal drug markets prosper. These technological innovations allowed criminals to exchange drugs on the internet while being relatively anonymous and untraceable. Operators in the illegal drugs industry moved online because dark web markets overcame some of the standard street drug trade problems. There’s a far lower chance of being marketed impure materials or incurring into violence when purchasing or selling substances. In actuality, dark web markets face lower scams and greater drug payoff than the street drug trade, and people use them as they feel safer.

What happens when these websites get shut down? Do operators in the illegal drugs market begin going back into the streets? Does this also result in an increase in violent and property crimes? My paper answers this question by looking at detailed data about crime in the USA and combining it with information about dark-web markets shutdowns.

I compare offenses in days immediately before and after shutdowns of dark web markets. I believe days before shutdowns as a great proxy for what could have occurred in the days immediately after shutdowns if dark web markets hadn’t been closed down. Thanks to this counterfactual, it’s possible to check if shutdowns of online drug trading platforms cause a rise in offline drug trading and offenses, which are usually connected to it.

I find that online drug trading is closely linked to street drug trading. Both markets act as replacements, with commerce moving back to the roads when dark web markets get closed down. However, the drug trade quickly goes back online as soon as new dark web markets open and get the trust of buyers and sellers of substances. What’s driving this result are offenses connected with the supply of drugs, such as the supply and transportation of illegal substances. An indication that it’s more difficult for drug sellers to get the trust of buyers after an unexpected shutdown of a dark web market.

I find no effect on street crimes usually associated with drug trading, like assaults, thefts, prostitution, and homicides. These crimes are typically related to the street drug trade as buyers have a tendency to commit crimes to fund their addiction and drug cartels use violence as a tool for keeping their business going.

To rationalize these findings, you want to consider the illegal drugs market as like the labor market. On the lookout for a new job is pricey. You want to go through job listings, prepare a CV, get interviewed, and when you eventually get a job that you enjoy, you may think twice before going through that time-consuming and nerve-wracking encounter again. The same holds for buyers and sellers of illicit drugs. When a purchaser matches a vendor, they will normally engage in a long-term relationship. Shutdowns of dark web markets break this connection, forcing un-matched sellers and buyers to try to find a new game on the roads. However, buyers and sellers operating online are prepared to return to it once they have the option to do so, as they believe online trading is safer.

These findings reveal how shutting down dark web markets has a comparatively short-run effect on the street drug trade. But they prove once again how difficult it’s to fight the drug trade and drug addiction by attempting to eliminate all potential sources of illegal drugs, which is called a supply-side policy. Drug users and criminal organizations quickly learn how to adapt to those policies and find alternative methods to keep selling and buying drugs. This became incredibly clear during the COVID-19 lockdown, when dark web markets became popular, as trading in the streets became considerably riskier.

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