[2022-01-26] Europol report on cryptocurrencies

[o_e_l_e_o]

Europol released a report regarding cryptocurrencies and criminal activities here (PDF link further down the page): Cryptocurrencies: tracing the evolution of criminal finances

The report makes for an interesting read, although most of it is just saying things we already know - Bitcoin is the most popular coin being used, Monero is the best privacy coin, cryptocurrencies are used on the dark web, etc.

The really interesting snippets I'll quote below:

However, the overall number and value of cryptocurrency transactions related to criminal activities still represents only a limited share of the criminal economy when compared to cash and other forms of transactions.

Criminals and criminal networks involved in serious and organised crime also continue to rely on traditional fiat money and transactions to a large degree, in addition to emerging value transfer opportunities.

However, the use of cryptocurrencies for illicit activities seems to comprise only a small part of the overall cryptocurrency economy, and it appears to be comparatively smaller than the amount of illicit funds involved in traditional finance.

So even Europol are admitting that illicit use of cryptocurrencies is low, criminals prefer to use fiat, and both in real terms and comparatively cryptocurrency is used to a far smaller degree than fiat is.

I know better than to think this report or the actual facts or evidence within will stop the media FUD that only criminals use bitcoin (see also: Why do you need privacy if you have done nothing wrong, Bitcoin is killing the planet), but perhaps we could now turn our attention to the massive fiat banks which have time and time again been found to be knowingly laundering trillions of dollars for various criminal networks, terrorists, and corrupt politicians? Wouldn't that be nice.

Self-mod to prevent spam.

[TheBeardedBaby]

Finally the "crypto is used only for fraud" narrative will now fall once for all. Most of the people I argue with about the usefulness of cryptocurrencies are playing the "fraud" card, because that's what the normal people here on the news about crypto the last 10 years. It's the "hackers money".
And the most pity part is that the bitcoin is easier to trace then some fiat.
Hope this will end soon.

[DaveF]

Finally the "crypto is used only for fraud" narrative will now fall once for all. Most of the people I argue with about the usefulness of cryptocurrencies are playing the "fraud" card, because that's what the normal people here on the news about crypto the last 10 years. It's the "hackers money".
And the most pity part is that the bitcoin is easier to trace then some fiat.
Hope this will end soon.

Please, I had surgery last week, don't make me laugh, it hurts a lot.
Although this is great news, and something to throw in the faces of people who keep saying it, people will believe what they want to believe.
And since so many people don't understand BTC / crypto, and for the most part don't want to, they will continue to keep believing that it's only bad people using it.

Wish is was not true, but we all know it is....

-Dave

[Upgrade00]

I believe the narrative that bitcoin is only used for scams is one that would only be able to go away with time. Educating the public would go a long way, but people would tend to mistrust ideas they do not fully understand such as bitcoin and the technology behind it.
Also, majority do not care about privacy, so they would hardly understand why bitcoiners value it so much, meaning many would associate it with scams.

Please, I had surgery last week, don't make me laugh, it hurts a lot.

Just learning about this now, wish you quick recovery. Bitcoiners are tough and you will pull through.

[o_e_l_e_o]

Finally the "crypto is used only for fraud" narrative will now fall once for all.

Highly unlikely, but at least it gives us one more source to point at when arguing against that nonsense claim. Additional bonus this time is it comes from Europol, which is an organization most people have at least heard of and is in no way associated with crypto, so nobody can claim bias as was the case when places like Chainalysis reached the same conclusions, such as their report here (https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime-2021.pdf) which showed only 0.34% of all cryptocurrency activity was illicit in some way.

Also, majority do not care about privacy, so they would hardly understand why bitcoiners value it so much, meaning many would associate it with scams.

This, unfortunately, is a problem across the board, with politicians and citizens alike pushing for such moronic ideas like banning all encryption or building backdoors in to all communication software, not realizing the consequences of such things.

[Lucius]

Public opinion is not shaped by Europol or any similar organization, but by what we call the mainstream media to which people are exposed every day of the year. In addition, all these media want as much negative information as possible, because it sells much better than good news - and the agenda is that Bitcoin is a tool used mainly by criminals and drug addicts who buy drugs online and that the world will remain in darkness and a ruined environment because Bitcoin consumes more energy than Argentina or some other random country that goes better with the article at that point.

In my free estimate, about 70% of all articles published about Bitcoin globally have a negative context, while those who are actually most involved in financial fraud receive preferential treatment from the mainstream media. Banks have the support of the media, politicians, companies, and others, and how could they not when they can afford to have them all on their payroll. The scandal with HSBC showed how deeply politics is involved in all this because when the bank was supposed to get a ban on working in the US, the most influential British politicians went to the US to save the day and succeeded.

[bbc.reporter]

I shake my head on why Bitcoin continues to be the most popular coin in those darknet marketplaces. Also, that Ethereum is also being accepted hehe. I reckon it should be the responsibility of the vendors to teach their customers about cryptocoin privacy and security. They should tell everyone to use only Monero.

In any case, this will also protect drug dealers from their careless customers who might not really know or care about privacy.

[o_e_l_e_o]

Public opinion is not shaped by Europol or any similar organization, but by what we call the mainstream media to which people are exposed every day of the year. In addition, all these media want as much negative information as possible, because it sells much better than good news - and the agenda is that Bitcoin is a tool used mainly by criminals and drug addicts who buy drugs online and that the world will remain in darkness and a ruined environment because Bitcoin consumes more energy than Argentina or some other random country that goes better with the article at that point.

Yes, but every new report, study, or other piece of evidence which comes out to debunk these obviously false claims is a good thing, particularly when it comes from an organization which is either impartial or (in the case of Europol) generally has an anti-bitcoin view.

They should tell everyone to use only Monero.

It's because of the volume. If you are making smaller trades and purchases it's fine, but you can't turn $100 million of Monero in to fiat instantly like you can with Bitcoin.

[cr1776]

Finally the "crypto is used only for fraud" narrative will now fall once for all. Most of the people I argue with about the usefulness of cryptocurrencies are playing the "fraud" card, because that's what the normal people here on the news about crypto the last 10 years. It's the "hackers money".
And the most pity part is that the bitcoin is easier to trace then some fiat.
Hope this will end soon.

Once that runs out, it will need to be controlled "to protect the children".  Or bitcoin might be racist or sexist.  Or transphobic.  Or perhaps they'll go back to the "fund terrorism" stuff.  They try to recycle this stuff to try and control and divide people.  Since they don't have a rational argument that can withstand debate, the standard canards are rolled out.

Just look at the Biden admin today in their terror threat statement arguing that speech is terrorism:

SUMMARY OF THE TERRORISM THREAT TO THE UNITED STATES: The United States remains in a heightened threat environment fueled by several factors, including an online environment filled with false or misleading narratives and conspiracy theories... These threat actors seek to exacerbate societal friction to sow discord and undermine public trust in government institutions to encourage unrest, which could potentially inspire acts of violence. [emphasis added]...

[PrimeNumber7]

Finally the "crypto is used only for fraud" narrative will now fall once for all.

Highly unlikely, but at least it gives us one more source to point at when arguing against that nonsense claim. Additional bonus this time is it comes from Europol, which is an organization most people have at least heard of and is in no way associated with crypto, so nobody can claim bias as was the case when places like Chainalysis reached the same conclusions, such as their report here (https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime-2021.pdf) which showed only 0.34% of all cryptocurrency activity was illicit in some way.

I believe the Europol report is actually citing the chainanalysis report -- they are not coming to the same conclusion (they are accepting that the chainanalysis report is credible).

The report also cited another study that claims there is a much larger percentage of transactions involved in criminal activity.

The report also noted that it is fairly rare for privacy coins to be used for criminal activity, and it speculated that this is because of a lack of liquidity. This would lead to the argument that criminal activity that uses bitcoin is a function of liquidity, not a function of how bitcoin itself works.

Another interesting tidbit is that the report mentioned that most major exchanges have delisted most privacy coins, generally at the request of regulators. This reduces liquidity of privacy coins, making them less attractive for criminals to use.

[o_e_l_e_o]

Once that runs out, it will need to be controlled "to protect the children".

You're too late on that one. Lindsey Graham has already pushed the horrendous EARN IT Act back through the Judiciary Committee and on to the Senate. This legislation will essentially ban encryption and allow the government to read any and all communications, under the guise of tHiNk Of ThE cHiLdReN. Those will be the same children they are happy to let starve in poverty, separate from the parents and keep in cages, or bomb with unmanned drones if they happen to be unfortunate enough to live in a country with oil reserves. But they need to spy on all your communications. You know, for the children.

Another interesting tidbit is that the report mentioned that most major exchanges have delisted most privacy coins, generally at the request of regulators. This reduces liquidity of privacy coins, making them less attractive for criminals to use.

Anyone using a privacy coin to gain privacy, criminal or otherwise, isn't doing it through a centralized KYC-requiring exchange.

[PrimeNumber7]

Another interesting tidbit is that the report mentioned that most major exchanges have delisted most privacy coins, generally at the request of regulators. This reduces liquidity of privacy coins, making them less attractive for criminals to use.

Anyone using a privacy coin to gain privacy, criminal or otherwise, isn't doing it through a centralized KYC-requiring exchange.

I don't think I would agree with that statement.

As I mentioned, one reason why privacy coins are not more popular is their lack of liquidity. In other words, it is difficult to convert them to/from dollars (or to/from other things of value).

There are plenty of scenarios in which someone may want to use a privacy coin to conduct some business they want kept especially secret, but are willing to use a centralized exchange. For example, someone may believe buy some privacy coin, conduct some business, for example, pay for something that has the potential to harm their reputation, receive money for some related transaction, and subsequently want to sell their privacy coin.

The exchange would know they had purchased (and sold) the privacy coin, but they would have no idea what they did with it.

[DaveF]

Another interesting tidbit is that the report mentioned that most major exchanges have delisted most privacy coins, generally at the request of regulators. This reduces liquidity of privacy coins, making them less attractive for criminals to use.

Anyone using a privacy coin to gain privacy, criminal or otherwise, isn't doing it through a centralized KYC-requiring exchange.

I don't think I would agree with that statement.

As I mentioned, one reason why privacy coins are not more popular is their lack of liquidity. In other words, it is difficult to convert them to/from dollars (or to/from other things of value).

There are plenty of scenarios in which someone may want to use a privacy coin to conduct some business they want kept especially secret, but are willing to use a centralized exchange. For example, someone may believe buy some privacy coin, conduct some business, for example, pay for something that has the potential to harm their reputation, receive money for some related transaction, and subsequently want to sell their privacy coin.

The exchange would know they had purchased (and sold) the privacy coin, but they would have no idea what they did with it.

And beyond that due to their nature once it's off the exchange the really privacy concerned people will send it to other addresses / wallets that they control before sending it back to their 'spending' wallet.

With a little work and some time you can shuffle it around enough that it really becomes just about impossible to trace.
And as I have mentioned in some other places. If the NSA or whoever wants to know what you are doing, don't fool yourself they can put enough resources into it to figure it our.

-Dave

[o_e_l_e_o]

And beyond that due to their nature once it's off the exchange the really privacy concerned people will send it to other addresses / wallets that they control before sending it back to their 'spending' wallet.

That's my point. The really privacy concerned people aren't using a KYC-ed centralized exchange to buy this coin in the first place. If the governments of the world get their way then eventually even just owning a privacy coin will make you a target for "enhanced surveillance" or something equally crazy, since any citizen wanting to keep even a shred of privacy in their lives is automatically suspicious as far as our governments are concerned.

Still, the only privacy coin which actually works - Monero - is tradable on Binance, Huobi, KuCoin, Kraken, Bitfinex, and a bunch of other huge exchanges.

[Ozero]

In any case, this is very good news coming from a reputable international law enforcement agency and very fresh, dated January 2022. We have the right and duty to use this information to expose illegal attacks on cryptocurrencies that it is cryptocurrencies that have significantly increased the level of crime in the world.
Yes, apparently, the criminals do not yet own the cryptocurrency enough to freely use it and are afraid that changes in its regulation will not allow them to withdraw funds from the cryptocurrency without leaving their identification data. Cash is still the most untraceable.

[aoluain]

Interesting report and nice to see some sense and reality prevailing regarding the
use of Bitcoin v's FIAT by criminals.

And beyond that due to their nature once it's off the exchange the really privacy concerned people will send it to other addresses / wallets that they control before sending it back to their 'spending' wallet.

That's my point. The really privacy concerned people aren't using a KYC-ed centralized exchange to buy this coin in the first place. If the governments of the world get their way then eventually even just owning a privacy coin will make you a target for "enhanced surveillance" or something equally crazy, since any citizen wanting to keep even a shred of privacy in their lives is automatically suspicious as far as our governments are concern.

Still, the only privacy coin which actually works - Monero - is tradable on Binance, Huobi, KuCoin, Kraken, Bitfinex, and a bunch of other huge exchanges.

Its a pity that this could end up being the case by using a privacy coin. By just
using lets say Monero doesnt necessarily mean we are avoiding authorities, we
might well use the added privacy to avoid those who might be trying to track
our cyrpto movements particularly if you would be moving sizeable amounts regularly.
There are legitimate benefits to Monero.

[o_e_l_e_o]

There are legitimate benefits to Monero.

Absolutely. There are plenty of perfectly legal and valid reasons for any and every piece of technology which improves your privacy, be that Monero, coinjoins, mixers, end to end encryption, PGP, Tor, whatever. But that doesn't stop governments around the world trying to control or outright ban these things. There is the EARN IT Act I spoke about above, which is attempting to ban end to end encryption in the US. I recently read on the /r/privacy subreddit that the UK government have introduced a similar piece of legislation called No Place To Hide, again under the same nonsense about "protecting children", and another piece of legislation in the EU called Chat Control. Cambodia have just launched their "National Internet Gateway" which lets the government monitor everything its citizens do online.

In the government's eyes, wanting privacy makes you suspicious. If they can't monitor everything you say, everything you do, everything you buy, everywhere you go, then obviously you must be doing something illegal, right? Not long before thoughtcrime becomes real.

[PrivacyG]

In the government's eyes, wanting privacy makes you suspicious. If they can't monitor everything you say, everything you do, everything you buy, everywhere you go, then obviously you must be doing something illegal, right? Not long before thoughtcrime becomes real.

This.  The day we fully give up our right to privacy is going to be a dark one.  Today, you have to explain why you want not to be monitored or you become suspicious.  You have to give an explanation for wanting to get off social media.  Even to friends and the society in general, it got to a point where nobody cares.  Everyone is too focused on the trends to care that every single trace of theirs is stocked up somewhere.

Want to pay in Bitcoin?  What are you, a serial killer?  Where did you get it from, drug deals?  And it goes on infinitely.  Looking for privacy is almost misinterpreted as looking to hide a corpse or dirty money.  And once again, it is creepy that the society is looking at it this way nowadays.

We can clearly see the level of crimes with Cryptocurrencies is too low for anyone to say Bitcoin poses a threat to society.  It rather poses a threat to their plans of monitoring all of us, or at least did so until Blockchain Analysis became a thing.  All these pieces of legislation you have named are proof of it.  They want you to be seen as a pedophile for using Tor, a drug dealer for using E2E encrypted communication software, a terrorist for using free money, a money launderer for using Coin Join and an absolute threat to the society for using Monero.

-
Regards,
PrivacyG

[aoluain]

and generally society is being blindly led down the path of ever eroding privacy.

These new moves by governments to erode privacy is really going largely unnoticed
by the general public. Everyone is happy to listen to what they are being fed by the media
and are consumed by social media. If more people took the time to properly research
what Bitcoin and other worthwhile legacy projects can offer to their benefit they would
realise what they are being fed is just a smokescreen.

[Kakmakr]

I think one of the contributing factors why many criminals still prefer using Fiat currencies are the fact that many of them still only wants to use Fiat currencies and they know that most criminals are caught, when the bitcoins or Crypto currencies are converted back to Fiat on third party services (with KYC requirements)

A lot of them also doubt the pseudo anonymity and privacy that Crypto currencies promise, with forensic Blockchain technology improving and also Mixer services being compromised. (Like ToR nodes that gets infiltrated by 3Letter agencies)