April 1, 2023

According to a report published by Europol, encryption is one of the main tools used by individuals involved in terrorist financing. PayPal, MoneyGram, Western Union and traditional banks are also on the list, contrary to what some government officials say about digital assets.

The 2022 EU Terrorism Situation and Trends Report says there are many “legitimate sources” used to fool law enforcement agencies and finance criminal activity. Bad actors are still able to create international monetary networks to support their operations.

These actors receive “donations” from individuals in Europe and then transfer funds through non-profit organizations, such as fake religious and humanitarian efforts, through banking institutions using small amounts of money, cryptocurrencies and crowdfunding sites.

The latter includes platforms such as YouTube, Patreon and GoFundMe. In addition, these criminals can allegedly use Amazon Pay and PayPal to launder and transfer their funds.

When it comes to cryptocurrencies, Europol claims that these assets allow criminals to maintain a degree of anonymity for senders and recipients. In particular, Spain reported a shift from traditional banking and remittance services to digital assets. This trend has increased since 2020.

These funds are used to pay for propaganda, to pay terrorists’ legal fees, and more. A recent conference with more than 1,700 registered participants from over 100 countries showed that cryptocurrencies are a key asset in preventing these illicit activities.

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The price of BTC traded sideways on the 4-hour chart. resource: BTCUSDT trading view

Cryptocurrencies allow law enforcement to track funds

As Bitcoinist reported earlier, a press release from the European Police Agency (Europol) stated that cryptocurrencies and digital assets could be important in the fight against organized crime and cybercrime. Involvement of law enforcement agencies6th Global criminal finance and cryptocurrency conference with other agencies, regulators and experts.

Cryptocurrencies are known as tools that enable criminals to launder money and engage in illegal activities. At the meeting, Europol presented a contrary case in favor of digital assets and law enforcement.

The agency claims that encryption, blockchain and the underlying technology behind its features can bring crime-fighting into the future. Most digital assets operate using transparent, public, and immutable ledgers that can provide regulators and law enforcement agencies with a unique insight into an entity’s financial health. According to Europol:

However, with the right tools, capabilities and cooperation, the unique properties of blockchain-based technology offer unprecedented opportunities to investigate organized crime and money laundering networks and recover stolen funds.

Europol has been able to trace Bitcoin and Ethereum transactions for some time. Law Enforcement Agencies 2019 Hold meetings with big names in the industry like Binance, Bitfinex, Coinbase and more.

At the time, the agency provided company representatives with “traceable certificates stored in the Bitcoin blockchain” to highlight the technology’s benefits. Now, government agencies appear to be turning that potential into real-world use cases by partnering with private companies to “innovate” on Bitcoin and other blockchains and develop “tools and analytics to track money.”

According to the press release:

Improving the understanding and capacity of all actors (regulators, law enforcement, private sector) in the crypto space is critical to combating organized crime and money laundering, whether physical or virtual.

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