Despite the rise of privacy coins like Monero, Bitcoin remains the cryptocurrency most used by criminals.
Financial crime also remains the main illicit use of cryptocurrencies, according to a recent Europol Internet Organized Crime Threat Assessment report.
Bitcoin's popularity with criminals raises concerns
Bitcoin has become a favored asset for ransomware groups due to its ease of acquisition for unsophisticated users compared to alternatives such as Monero (XMR). Nevertheless, criminals often convert Bitcoin into stablecoins to avoid market volatility, especially if they obtain it through investment scams.
According to the report, the rise in cryptocurrency prices and media attention has led to a surge in fraudulent investment schemes. Cryptocurrencies, particularly Tether (USDT), the U.S. dollar-pegged stablecoin on the Tron (TRX) network, have frequently been the subject of such schemes due to the network's low transaction fees.
Additionally, the use of altcoins in illegal activities has skyrocketed, and underground banking and cryptocurrency debit cards have become popular as they can be quickly converted into cash at automated teller machines (ATMs).
There is also a growing trend to use encrypted messaging apps to exchange cash for cryptocurrency, allowing criminals to evade compliance checks and hide their identities.
Meanwhile, Europol expressed concern about the approval of spot Bitcoin ETFs, saying they could open new avenues for fraudsters. Moreover, the companies issuing these ETFs hold large cryptocurrency reserves, making them attractive targets for fraudsters.
Monero is gaining popularity among criminals
While Bitcoin remains the cryptocurrency of choice for ransomware gangs, the Europol report highlighted the growing use of Monero (XMR) as an alternative, whose privacy features make it a great choice for criminals looking to hide their funds.
In January 2024, a large-scale cryptojacking operation was uncovered in Ukraine, which involved the covert mining of €1.8 million ($1.95 million) worth of cryptocurrencies. The scheme was primarily focused on mining Monero, but also included Ethereum (ETH) and Toncoin (TON).
The report stressed that the decentralization inherent in Web3, blockchain technology and peer-to-peer (P2P) networks creates an environment conducive to cybercrime. These technologies allow transactions to be conducted anonymously and beyond the reach of authorities. Europol warned that as these decentralized systems continue to evolve, they will increasingly facilitate cybercriminal activity.
Europol noted that it is difficult for law enforcement to track and prosecute such activity, especially when virtual asset service providers are non-compliant and based overseas. This is due to privacy laws, particularly regarding end-to-end encrypted (E2EE) communication platforms, which prohibit law enforcement from accessing criminal communications.
