Monero has quietly become the preferred currency of dark web marketplaces because it’s the only major cryptocurrency that makes transactions genuinely unreadable on-chain. Bitcoin’s public ledger, which law enforcement used to take down Hydra Market in 2022, is a structural liability for criminal use. Despite Kraken, Binance, and more than a dozen other exchanges delisting XMR since 2023, darknet adoption has only grown. Zcash gets the ETF headlines; Monero gets the actual use.
The Bitcoin Problem Investigators Solved
Bitcoin was never built for privacy. That was never the point. Its public ledger was a feature, not an oversight , it made trustless transactions between strangers possible without a bank in the middle. Every transaction sits permanently on that chain, visible to anyone with the right tools.
Law enforcement eventually built those tools. In 2022, German police used blockchain analysis to trace approximately $5.2 billion in Bitcoin transactions, which provided the foundation for shutting down Hydra Market , at the time the world’s largest darknet marketplace. That takedown was partly a police operation and partly a demonstration of what Bitcoin’s transparency makes possible. Firms like Chainalysis have only gotten better at this kind of tracing since.
Dark web operators noticed. A payment system that puts a permanent, searchable trail between every buyer and seller is a liability once investigators learn to read it. The operators running marketplaces like Empire Market tried to work around Bitcoin’s transparency by requiring cryptocurrency tumbling and mixing services. Those workarounds slow investigators down. They don’t stop them , as the 40-year sentence handed to Empire Market’s co-creator this October demonstrates.
What Monero Actually Does
Monero uses three interlocking privacy technologies that work at the transaction level.
Ring signatures bundle a real transaction with several decoy outputs, making it impossible for an outside observer to identify which input was actually spent. Stealth addresses generate a one-time address for each transaction, so the receiving address visible on-chain is never reused and never linked to the recipient’s actual wallet. RingCT (Ring Confidential Transactions) hides the amounts involved in each transaction.
The combined effect: sender, receiver, and amount are all obscured. No blockchain analysis firm has published peer-reviewed evidence of breaking Monero’s cryptographic privacy at scale. The AudiA6 laundering case we covered shows how thoroughly blockchain forensics can follow Bitcoin through mixers and exchanges. Monero doesn’t give investigators that trail to follow in the first place.
The Crack That Isn’t a Breach
Monero isn’t perfect. TRM Labs’ February 2026 research found something worth knowing: roughly 14-15% of reachable Monero network nodes showed unusual behavior , non-standard relay timing, infrastructure clustering , consistent with “spy nodes” trying to infer who’s transacting with whom by observing the network itself, not by reading the cryptographic content of transactions.
This is an important distinction. Spy nodes can potentially leak metadata ,who’s talking to whom, from which IP addresses , but they cannot read what the transaction contains. Nobody has demonstrated the ability to identify Monero transaction amounts or parties from the blockchain itself.
Monero’s developers have treated the spy-node finding seriously enough to make network-layer defenses a priority in upcoming protocol work. They’re also preparing a more fundamental upgrade.
FCMP++ and Why It Matters
The upcoming FCMP++ hard fork will replace Monero’s current 16-decoy ring signature system with a zero-knowledge proof that hides transactions not among 16 possible outputs but among the entire unspent output set of the Monero blockchain.
In plain terms: instead of “this transaction could be one of 16 things,” it becomes “this transaction could be any transaction ever made on Monero.” The anonymity set goes from 16 to millions. This directly addresses the most technically credible line of attack on Monero’s current implementation , the ability to statistically narrow down which ring signature members are likely decoys.
The upgrade is arriving at a sensitive moment. A $7.9 million hack at the Coinsbuy exchange was routed through Monero, renewing public scrutiny of privacy coins as a laundering rail. The upgrade will only intensify that regulatory conversation.
Why Exchanges Keep Dropping a Coin That Keeps Getting Used
Kraken’s October 2024 decision to cut off Monero for European customers wasn’t because demand for XMR fell. The company was explicit: it delisted the coin because of “regulatory changes” , specifically, the EU’s anti-money-laundering framework and FATF’s travel rule, which requires financial institutions to share sender and receiver information when funds move.
The travel rule is impossible to comply with for Monero. The chain itself won’t tell you who sent what. Compliance teams can’t produce data they don’t have, so they drop the asset. Binance dropped XMR in February 2024. More than a dozen other exchanges followed suit since 2023.
This creates a real friction for ordinary retail buyers, who don’t know how to use decentralised exchanges or peer-to-peer markets to acquire XMR. Darknet vendors and their customers evidently do. The delistings filter out casual buyers without reducing the coin’s utility for the people who actually need it.
Zcash Got the ETF. Monero Got the Dark Web.
The contrast with Zcash is sharp. In August 2026, Grayscale converted its Zcash Trust into a spot ETF (ZCSH) on NYSE Arca , the first US spot ETF around a privacy-focused cryptocurrency. DCG International Investments followed with a $100 million purchase of ZCSH shares. ZEC went from around $50 to inside the top 10 cryptocurrencies by market cap. The entire privacy coin sector swelled from $7.1 billion to $33.6 billion.
This is a liquidity and access story, not a utility story. Zcash’s optional shielded transactions are real privacy technology. But Wall Street isn’t buying ZCSH because criminals need an alternative to Bitcoin. It’s buying a regulated product that can sit on a balance sheet, tracking a volatile asset.
Monero’s darknet growth is a utility story. It’s winning because it does the specific thing the use case requires, and it’s winning while exchanges shut it out. That’s a different kind of validation.
XMR hit a record $797.73 in January 2026 and sat around $555 by early October , down 30% from that peak but still up 73% over the trailing year. The delistings dent the chart. They haven’t dented the use case.
Understanding the Deep Web vs. Dark Web Context
For anyone unfamiliar with the terminology: the dark web is the small, deliberately hidden layer of the internet accessible only through special software like Tor. It hosts anonymous marketplaces, forums, and services — some legitimate, most not. Understanding this distinction matters when evaluating Monero adoption statistics. The 48% figure from TRM Labs refers specifically to newly launched marketplaces on the dark web, not general crypto usage.
The connection between Monero and criminal dark web economies is not surprising , it’s the predictable outcome of building a coin that does what criminals need: transactions that can’t be traced by the people trying to trace them.
What This Means Going Forward
The two-track story of privacy coins is likely to widen. Zcash accumulates institutional money and regulatory legitimacy. Monero accumulates the actual criminal economy while regulators run out of exchanges to delist it from.
The FCMP++ hard fork, when it ships, will erase the most technically viable remaining method for investigators to narrow Monero transactions. That will deepen the regulatory problem while solving the privacy problem. It’s unlikely to reduce darknet adoption.
The one genuine vulnerability , spy-node metadata leakage at the network level , is being addressed. If it’s fixed before it’s fully exploited, Monero will have closed its last meaningful security gap. Regulators have responded by removing it from exchanges. Whether that’s an effective strategy depends on how many darknet vendors actually need an exchange to access XMR. Based on the TRM Labs data, the answer is: not many.
Frequently Asked Questions
Why is Monero replacing Bitcoin on the dark web?
Bitcoin’s public blockchain creates a permanent, traceable record. Investigators used it to shut down Hydra Market in 2022 by tracing $5.2 billion in transactions. Monero’s ring signatures, stealth addresses, and RingCT protocol make its transactions unreadable on-chain.
How many dark web markets use Monero?
48% of newly launched darknet markets in 2025 accepted only Monero, according to TRM Labs research. Bitcoin still dominates in ransomware payments, where victims have little choice.
Why are exchanges banning Monero if it’s growing?
Regulatory compliance. The EU’s MiCA framework and FATF travel rule require exchanges to verify sender and receiver information. Monero’s design makes that impossible, so compliance teams drop the asset. This doesn’t reduce its utility for darknet users who can access it through decentralized exchanges and peer-to-peer markets.
What is Monero’s FCMP++ upgrade?
A hard fork replacing the current 16-decoy ring signature system with a zero-knowledge proof hiding transactions among the entire Monero unspent output set. It will significantly increase anonymity and remove the most credible remaining technical method for narrowing down Monero transactions.
What is the difference between Monero and Zcash?
Zcash has optional privacy features and recently received a US spot ETF, attracting institutional investment. Monero has mandatory privacy by design and no ETF , it’s growing on dark web markets while Zcash is growing on Wall Street.
Can law enforcement track Monero?
The cryptographic content of Monero transactions has not been broken at scale. TRM Labs identified a potential metadata leak through “spy nodes” at the network level, but this does not allow reading transaction amounts or identities , only observing network behavior.