Bitcoin and cryptocurrencies have long had a reputation for being the payment tools of criminals. Now, Europol claims billions of dollars are being illegally laundered with cryptocurrency in Europe.
According to the European Union Agency for Law Enforcement Cooperation (Europol), three to four billion pounds ($4.1 to $5.5 billion) of criminal money is being laundered using cryptocurrency in Europe alone. Europol’s director, Rob Wainwright, told BBC’s Panorama:
It’s growing quite quickly and we’re quite concerned. They’re not banks and governed by a central authority so the police cannot monitor those transactions. And if they do identify them as criminal they have no way to freeze the assets unlike in the regular banking system.
Hypothetically, the process of laundering money via Bitcoin would involve purchasing the cryptocurrency, breaking into its smallest values – called Satoshis – and distributing it to various addresses. Some reports claim this process “[erases] any trail that the criminal money might [ordinarily] leave behind,” but that isn’t entirely true. Bitcoin itself isn’t completely anonymous and can be traced by savvy investigators via public ledgers. Other “privacy coins” like Monero, however, are more difficult to track.
CALLS FOR REGULATION
Europol’s shocking claim conveniently comes at a time when many European governments are calling for a crackdown on cryptocurrency.
French Finance Minister Bruno Le Maire and interim German Finance Minister Peter Altmaier have both called for global regulation, citing “damaging consequences for misinformed investors who do not understand the risks they are exposing themselves to.”
British Prime Minister Theresa May has also expressed her concerns regarding cryptocurrency’s criminal usage, stating that she is looking “very seriously” at cryptocurrencies “because of the way they are used, particularly by criminals.”
International Monetary Fund (IMF) chief Christine Lagarde also recently told the World Government Summit in Dubai that “there is probably quite a bit of dark activity [in cryptocurrencies],” while claiming that regulation is an inevitability.
Fabian Libeau, VP of San Francisco-based cybersecurity company RiskIQ, also did not mince words when talking about cryptocurrencies criminal potential:
We are seeing threat actors around the world exploiting what is already a hostile currency in a lawless digital world. Threat actors hack vulnerable sites or spin up fake, illegitimate websites to siphon money off of major brands, often with typosquatting domains and fraudulent branding.
Europol’s claim also comes on the heels of high-profile cybercriminal Sergey Medvedev’s arrest in Thailand. Medvedev, the Russian co-founder of criminal marketplace Infraud, was reportedly in possession of more than 100,000 Bitcoins when his apartment was raided.