- A new Europol report has said that illegal Bitcoin use makes up only 1.1% of its activity, compared to 20% in 2013
- A massive increase in Bitcoin trading is behind the shift
- Europol also warned about the “top threat” represented by privacy enhancing technologies such as privacy coins and mixing services
A Europol report has revealed that only 1.1% of Bitcoin use is linked to criminal activity, a 94.5% reduction from 2013. This huge shift is due to the emergence in Bitcoin trading in the years since then, but it is not all good news – the report also states that privacy coins, wallets, and other related technology present a “top threat” to law enforcement agencies in Europe and that cyber criminals are getting smarter in how they handle illegally obtained cryptocurrency.
Europol – Cyber Criminals are Getting Smarter
In the new report on organized crime on the internet, called the Internet Organised Crime Threat Assessment (IOCTA) 2020, Europol states that cryptocurrencies “continue to facilitate payments for various forms of cybercrime”, with ransomware being the primary method used, and that perpetrators of such crimes have evolved their practices to utilize privacy-oriented coins and services to evade authorities.
These “privacy-enhanced coinjoin concepts” such as Wasabi and Samurai are becoming more popular with illegal cryptocurrency users, despite the likes of Chainalysis claiming to be able to track transactions in and out of some of these mixing services. Europol notes that cryptocurrencies have become the “default payment method for…ransomware and other extortion schemes” due to their “reliability, irreversibility of transactions and a perceived degree of anonymity”.
Authorities around the world have been trying to tackle this phenomenon in recent months by hiring blockchain analysis companies to try and assist them in tracking funds sent using privacy-enhancing technology.
Legal Bitcoin Use Dwarfs Illegal Use
The Europol report wasn’t entirely bad news for cryptocurrency however, as they revealed that legitimate use of cryptocurrencies has grown as a much faster rate than illegitimate use:
In 2019, the overwhelming majority of bitcoin transactions were linked to investment and
trading activity so, despite considerable abuse, criminal activity corresponds to only 1.1% of total transactions.
According to Europol’s own figures this represents a 94.5% drop from 2013, when sites like Silk Road were the primary use case for cryptocurrencies. Bitcoin trading is so popular that it dwarfs illegal use, something that advocates will be extremely happy about given Bitcoin’s continuing negative perception in the wider world.