Europol Reports Bitcoin as the ‘Most Abused’ Crypto Asset by Criminals

Bitcoin continues to be the cryptocurrency most commonly used by criminals, even with the availability of privacy coins like Monero, as reported by the Europol Internet Organized Crime Threat Assessment.

According to the report, ransomware groups prefer Bitcoin (BTC) for payments due to its ease of acquisition for non-savvy users compared to assets like Monero (XMR).

The Europol unit found that criminals often convert Bitcoin to stablecoins to avoid market volatility, especially when obtained through investment fraud. Law enforcement agencies are concerned about the challenges posed by non-compliant virtual asset service providers, particularly those based offshore.

The report also raises concerns about the potential risks associated with the approval of spot Bitcoin ETFs, which could create opportunities for scammers targeting less experienced crypto investors. The firms managing cryptocurrency ETFs may become targets for fraud due to the large reserves they hold in cryptocurrency, as noted by Europol.

Monero, the rising star in crypto crime

While Bitcoin remains the top choice for ransomware groups, the report acknowledges Monero as an alternative sometimes accepted by criminals. Europol describes Monero as a privacy coin that is often used to conceal funds by swapping other cryptocurrencies for XMR.

The report also highlights an increase in the use of crypto swap services for money laundering, specifically mentioning the swapping for Monero and other privacy coins as a common practice.

Additionally, the report mentions a cryptojacking scheme discovered in Ukraine in Jan. 2024, which mined over €1.8 million ($1.95 million) in cryptocurrencies including Monero, Ethereum (ETH), and Toncoin (TON).

Trends in crypto crime

Financial crimes, particularly involving investment fraud and money laundering, remain the primary illicit use of cryptocurrencies, as per Europol. The agency notes that rising cryptocurrency prices and media attention have led to an increase in investment fraud cases, with cryptocurrencies being the most reported product offered in fraudulent schemes.

Stablecoin Tether (USDT) on the Tron (TRX) network is increasingly involved in crypto crimes due to the network’s low fees. Europol also mentions a growing trend of altcoin use for illicit activities.

Underground banking is increasingly used for crypto laundering, and crypto debit cards for cash conversion at ATMs are becoming popular methods for criminals.

Privacy challenges for law enforcement

Europol highlights privacy laws as a significant obstacle for law enforcement agencies, particularly regarding communication encryption. The report mentions that mainstream end-to-end encryption (E2EE) platforms are increasingly used by offenders, posing challenges for lawful access to criminal communications by law enforcement agencies.

The emphasis on decentralization in Web3 is noted to create communication channels beyond government and private company control, making peer-to-peer networks and blockchains fertile environments for criminal activity, according to Europol.

The report acknowledges the challenges posed by decentralized services, such as the difficulty in stopping illegal operations even after they are uncovered. This is exemplified by services like Tornado Cash, which continue to operate despite being sanctioned, presenting a significant hurdle for law enforcement efforts, as highlighted by Europol.

Edited by Stacy Elliott.

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