In a recent report by Europol, Bitcoin has been identified as the most commonly exploited cryptocurrency by cybercriminals. The Europol Internet Organized Crime Threat Assessment (IOCTA) report for 2024 details how Bitcoin remains the preferred asset for ransomware groups, fraudsters, and money launderers, despite the emergence of privacy-focused coins such as Monero.
Bitcoin’s popularity among cybercriminals is primarily due to its accessibility. Non-savvy users can easily procure Bitcoin, making it the asset of choice for ransomware payments. However, to avoid the volatility of Bitcoin, criminals often convert their holdings to stablecoins like Tether (USDT) on the Tron network. This tactic allows them to maintain the value of their illicit gains before cashing out.
The report raises concerns about the recent approval of Bitcoin exchange-traded funds. The first Bitcoin ETF was approved in January 2024, allowing investors to speculate on Bitcoin’s price without directly owning the cryptocurrency. While this development could lead to increased mainstream adoption of Bitcoin, it also opens new avenues for fraud.
Scammers could abuse the rise of ETFs related to cryptocurrencies as people who do not have extensive experience in cryptocurrency will become increasingly exposed to them, said Europol. “Companies issuing cryptocurrency ETFs will also have to hold large reserves in cryptocurrency, which might make them valuable targets for fraudsters.”
Monero, a privacy-focused cryptocurrency, is also mentioned in the report as an alternative used by some ransomware groups. Monero’s privacy features make it a preferred choice for criminals looking to conceal their funds. Europol highlights the increased use of crypto swap services to convert other cryptocurrencies into Monero, thus leveraging its anonymity.
Cryptojacking and financial crimes
The report also mentions a significant cryptojacking scheme uncovered in January 2024 in Ukraine. This operation covertly mined over €1.8 million ($1.95 million) worth of cryptocurrencies, including Monero, Ethereum (ETH), and Toncoin (TON), from computers that it comprised to then mine cryptocurrency with.
Financial crimes, particularly investment fraud and money laundering, remain the primary illicit uses of cryptocurrencies. The rising prices of cryptocurrencies and media attention have exacerbated the prevalence of investment fraud cases.
US dollar-pegged stablecoin Tether on the Tron network is increasingly involved in crypto crime due to its low transaction fees. Europol notes that altcoin use for illicit activities is growing, with underground banking and crypto debit cards becoming popular methods for quick conversion to cash at ATMs.
Privacy laws and the decentralized nature of cryptocurrencies pose significant challenges for law enforcement agencies (LEAs). Europol explicitly mentions that end-to-end encryption (E2EE) communication platforms are increasingly used by offenders, making lawful access to criminal communications difficult.
“Mainstream E2EE communication platforms are increasingly used by offenders,” the report states. “The current regulatory framework regarding the protection of personal communications via E2EE creates challenges for LEAs’ lawful access to criminal communications.”
The report also highlights the potential risks associated with Web3’s emphasis on decentralization. Peer-to-peer (P2P) networks and blockchains, owned and controlled by their users, provide fertile environments for crime. Decentralized services can be nearly impossible to shut down, as evidenced by the continued operation of Tornado Cash, a service that was sanctioned by the Office of Foreign Assets Control yet is still seeing substantial inflows.
Information for this briefing was found via Decrypt and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
