Bitcoin is frequently used in cybercrime and fraud due to its stability and widespread acceptance, according to the report.
Bitcoin remains the most exploited cryptocurrency by criminals, according to a recent Europol Internet Organized Crime Threat Assessmentย report.ย
The report notes that Bitcoin is often converted to stablecoins like Tether (USDT) for stability. The lower transaction fees of the Tron blockchain have made it popular for USDT transactions. This process allows criminals to mitigate the volatility risk associated with cryptocurrencies while maintaining liquidity.
Rise of Privacy Coins: Monero’s Role
While Bitcoin continues to dominate, privacy-focused altcoins like Monero are increasingly favored by cybercriminals. Monero’s emphasis on privacy and anonymity through cryptographic techniques makes it difficult for law enforcement to trace transactions, according to Europol.
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Monero’s privacy features make it a preferred choice for ransomware attacks and dark web transactions. Its untraceable nature allows criminals to demand payments in Monero, making it challenging for authorities to track the perpetrators.ย
Evolving Cryptocurrency Laundering Techniques
The Europol report highlights evolving cryptocurrency laundering techniques. Investment frauds often use simple methods, relying on traditional channels like money mules and international bank accounts.ย
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However, encrypted messaging apps are now preferred for cash-to-crypto exchanges, bypassing compliance checks and concealing identities.
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The report also mentions the increasing use of crypto debit cards in cybercrime. These cards can quickly convert cryptocurrency to cash at ATMs, offering another layer of anonymity for criminals. This method of laundering funds has seen a resurgence, complicating law enforcement efforts to trace illicit transactions.
Bitcoin’s Misconceptions and Realities
Despite its frequent association with criminal activities, Bitcoin is not as anonymous as many believe, according to Wealth Management firm,ย Onramp Invest. Each Bitcoin transaction is immutably recorded on the blockchain and publicly available for anyone to view.ย
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On-chain forensics can trace the funding of illegal activities, making it possible for authorities to track and prosecute criminals.
Comparison with Cash
Contrary to popular belief, the use of Bitcoin for illicit activity is less than that of cash on both a total value and percentage basis. Bitcoin’s pseudonymous nature allows transactions to be traced back to their source with enough forensic effort, making it a less appealing option for criminals compared to cash.
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Companies like Chainalysis, Elliptic, and CipherTrace have significantly advanced on-chain forensic capabilities. These firms can track the flow of Bitcoin and link wallet addresses to real-world identities, providing valuable tools for law enforcement.
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Many law enforcement officers reportedly prefer criminals to use Bitcoin rather than cash because it is easier to track the flow of money. The transparent nature of the Bitcoin blockchain allows authorities to follow the trail of transactions, making it a less attractive option for criminals seeking anonymity.
