Is the current industry structure, which sees centralized exchanges dominating cryptocurrency trading volumes, set to change in the future? Europol predicts international regulatory demands on identity verification for established venues will drive privacy-conscious traders to so-called “criminal” services in the digital underground.
Europol investigates Cyber Crime of the Future
Europol (formerly known as European Police Office and Drugs Unit) recently released its 2019 annual assessment on the cybercrime threat environment. The report discusses the impact of technological developments, such as quantum computing and artificial intelligence (AI), on cybercrime. A section is also dedicated to the criminal abuses of cryptocurrencies. Check out more about Charity Coin
The agency noted that cybercrime agents report that cryptocurrencies pose problems for law enforcement. “Crypto investigations are now an integral part of law enforcement’s day-to-day business.” Therefore, investigators must be trained to deal with such investigations.
Europol’s research shows that cryptocurrencies play a key role in the underground market. They are used for the majority of “criminal to crime” (C2C), payments made on darknet marketplaces and forums. C2C payments are not the only thing that attackers want. Many hackers also ask for payment from victims of attacks like ransomware and DDoS extortion using cryptocurrencies. Even though criminally obtained money is already difficult to trace, they are often made more difficult by mixing services that obscure the financial trail.
Europol Predicts Rise in ‘Criminal” Crypto Exchanges within the Digital Underground
Europol Headquarters at the Hague in the Netherlands
According to the report’s most obvious development regarding crypto, it appears that many of the frauds and attacks that have previously been directed at other payment systems or fiat currencies, have now been extended to include cryptocurrency. Europol regularly sees malware, phishing, and frauds targeting crypto-investors, as well as new frauds like investments frauds related cryptocurrencies. This suggests that these approaches might be more successful because potential victims may not have as much knowledge about the new types of assets.
Cryptojacking continues to be an issue, but it seems to have peaked in 2018, and declined throughout 2019, partly due to Coinhive being shut down in March, the most widely used mining script. According to the report, the best cryptocurrencies were those that could be mined with either CPU or GPU and that were hard to track. Monero, which ticked both boxes was chosen as the first choice for this kind of activity. These incidents may have had a large impact on many victims, but the cost per victim is usually low so they are rarely reported.
Europol had previously reported that cryptocurrencies like monero, Zcash, and dash were becoming more privacy-oriented. However, the Europol now claims that BTC remains the currency of criminal choice. These developments are mainly related to darknet markets. Some of them accept XMR and some trade only in it.