According to the report, Bitcoin's stability and wide adoption make it frequently used in cybercrime and fraud.
According to a recent Europol Internet Organized Crime Threat Assessment, Bitcoin remains the cryptocurrency most abused by criminals. report.
The report noted that Bitcoin is often exchanged for stablecoins such as Tether (USDT) for their stability. The Tron blockchain is popular for USDT transactions due to its low transaction fees. This process allows criminals to mitigate the volatility risks associated with cryptocurrencies while still maintaining liquidity.
The Rise of Privacy Coins: Monero’s Role
While Bitcoin continues to dominate, privacy-focused altcoins like Monero are increasingly becoming the preferred cryptocurrency for cybercriminals, with Europol saying its emphasis on privacy and anonymity through encryption technology makes it harder for law enforcement to trace transactions.
Monero's privacy features make it a preferred choice for ransomware attacks and dark web transactions, and its untraceable nature allows criminals to demand payments in Monero, making it difficult for authorities to track down the culprits.
Evolving cryptocurrency laundering methods
The Europol report focuses on evolving cryptocurrency laundering methods, with investment fraud often using simple techniques that rely on traditional channels such as money mules and international bank accounts.
But encrypted messaging apps that circumvent compliance checks and hide identities are now the preferred way to swap cash for cryptocurrency.
The report also notes the growing use of cryptocurrency debit cards in cybercrime. These cards offer criminals additional anonymity as cryptocurrencies can be quickly converted into cash at ATMs. This money laundering method is once again gaining popularity, complicating law enforcement efforts to track illicit transactions.
Bitcoin misconceptions and reality
Despite Bitcoin being frequently associated with criminal activity, it is not as anonymous as many believe, according to an asset management firm. On-ramp investmentEach Bitcoin transaction is immutably recorded on the blockchain and made publicly available for anyone to see.
On-chain forensics allows funds to be traced back to illegal activities, enabling authorities to track and prosecute criminals.
Comparison with cash
Contrary to popular belief, Bitcoin's use for illicit activities is less than cash, both in total value and percentage, and Bitcoin's anonymity means that transactions can be traced back to their origin with sufficient forensic effort, making it a less attractive option than cash for criminals.
Companies like Chainalysis, Elliptic, and CipherTrace have significantly improved on-chain forensic capabilities. These companies can trace the flow of bitcoin and link wallet addresses to real-world identities, providing law enforcement with a valuable tool.
Many law enforcement officials reportedly prefer criminals to use Bitcoin because it is easier to trace funds with it than with cash. The transparency of the Bitcoin blockchain allows authorities to follow a trail of transactions, making Bitcoin an unattractive option for criminals seeking anonymity.
