German Finance Ministry Worried About Monero and Zcash Uptake

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The German Ministry of Finance has released a report which claims that Monero and Zcash may be used to fund illegal activities as Bitcoin becomes more mainstream and therefore more monitored. The report, First National Risk Analysis for 2018/19, is the result of a year and a half of research and finds that Monero is still incredibly popular among anonymity-seeking users and is more likely to be used by those wishing to engage in illicit activities.

Bitcoin’s Maturity Sees Privacy Coins Flourish

Monero has been the token of choice for many dark web users since its inception in in 2014, and it seems that its use is still as prevalent as ever, a fact that is likely to continue as Bitcoin attempts to shed its reputation as a facilitator of nefarious activities. The report distinguishes between pseudo-anonymous and truly anonymous cryptocurrencies, citing that pseudonymity still enables investigations on public blockchains, a fact that has enabled authorities in several countries to make high profile arrests based on tracing Bitcon usage. Truly anonymous cryptocurrencies like Monero and Zcash on the other hand are practically untraceable, and it is this fact, combined with the increased surveillance on the Bitcoin blockchain by authorities, that makes them much more suitable for use in illegal activities. As a result, these two coins are growing in ascendency among the criminal classes.

Terrorists Still Prefer Cash

The report also states that a major concern for authorities worldwide should be fundraising by terrorist groups through cryptocurrency – just days before the report was published, German police announced that they had investigated a 0.1 transfer sent to the wallet of the Halle synagogue killer, whose attack was allegedly funded by local far-right activists. This is despite two pieces of research in recent months that have stated that terrorists still prefer to use cash over cryptocurrencies, and individual cases that make headlines are not reflective of a growing trend towards digital currencies, which in most cases still need to be cashed out somewhere at the other end.