According to the latest Europol Internet Organized Crime Threat Assessment report, Bitcoin continues to be the most favored cryptocurrency among criminals, particularly ransomware groups. Although privacy coins like Monero (XMR) are becoming more popular, Bitcoin’s ease of use keeps it in the lead.
Bitcoin’s Dominance in Criminal Activities
Bitcoin remains the top choice for ransomware groups due to its user-friendly nature, making it accessible for individuals who are not technologically inclined. Criminals often convert Bitcoin into stablecoins to avoid the risks associated with market volatility, especially when the cryptocurrency is obtained through fraudulent investment schemes.
The report points to a rise in fraudulent investment schemes driven by increasing cryptocurrency prices and media attention. Tether (USDT), a U.S. dollar-pegged stablecoin on the Tron (TRX) network, is frequently used in these schemes because of the network’s low transaction fees.
Additionally, there is a notable increase in the use of alternative cryptocurrencies in illegal activities. Underground banking systems and crypto debit cards are gaining popularity for their ability to quickly convert digital currencies into cash at ATMs. Encrypted messaging apps are also being used for cash-to-crypto exchanges, helping criminals avoid compliance checks and maintain anonymity.
Europol has expressed concerns about the potential approval of spot Bitcoin ETFs, warning that these could open up new opportunities for scammers. Companies that issue these ETFs usually hold large amounts of cryptocurrency, making them attractive targets for fraud.
Increasing Use of Monero Among Criminals
While Bitcoin remains the dominant choice, Europol’s report highlights the growing use of Monero (XMR) among criminals. Monero’s strong privacy features make it an ideal option for those seeking to hide their financial transactions.
In January 2024, authorities in Ukraine uncovered a significant crypto-jacking operation that had mined over €1.8 million ($1.95 million) worth of cryptocurrencies, including Monero, Ethereum (ETH), and Toncoin (TON). This case illustrates the appeal of privacy coins for illegal activities.
The report stresses the challenges posed by the decentralization of Web3, blockchain technology, and peer-to-peer (P2P) networks. These technologies facilitate anonymous transactions, complicating law enforcement efforts to track and prosecute cybercriminals. Europol warns that as these decentralized systems continue to evolve, they will increasingly enable cybercrime.
Law enforcement agencies face significant difficulties in combating these activities, particularly when virtual asset service providers are non-compliant and based offshore. Privacy laws, especially those regarding end-to-end encryption (E2EE) on communication platforms, further impede authorities’ ability to access and investigate criminal communications.
Europol’s report underscores the ongoing struggle against the misuse of cryptocurrencies in criminal activities and highlights the need for continuous vigilance and regulatory adaptation in response to evolving technologies.
