Is the current industry landscape, where centralized exchanges dominate cryptocurrency trading volumes, about to change in the coming years? Europol predicts that international regulatory demands for identity verification on established venues will push privacy concerned traders into so-called ‘criminal’ services in the digital underground.
Europol Investigates Cyber Crime of the Future
The European Union Agency for Law Enforcement Cooperation (Europol), formerly known as the European Police Office and Drugs Unit, recently released its 2019 annual assessment of the cybercrime threat landscape. The report focuses on the potential impact of future technological developments such as artificial intelligence (AI) and quantum computing on cybercrime, and also dedicates a section to what it defines as the criminal abuse of cryptocurrencies.
The agency notes that cybercrime investigators report that cryptocurrencies continue to pose challenges for law enforcement. Additionally, “Crypto investigations are now a core part of daily business for law enforcement. As a result, investigators require training to ensure they have the appropriate skills to handle such investigations.”
Cryptocurrencies play an essential role in the underground economy according to Europol’s findings. They are used for most “criminal to criminal” (C2C) payments on darknet forums and marketplaces. In addition to C2C payments, many attackers demand payment from victims for attacks such as ransomware or DDoS extortion by cryptocurrencies. The agency complains that such criminally obtained funds, while already inherently challenging to trace, are often further laundered through mixing services, which serve to obfuscate the financial trail.
The most apparent development with regard to crypto, according to the report, is that attacks and frauds which historically targeted other payment systems or fiat currencies have now been adapted to incorporate cryptocurrencies.