Criminals rarely use cryptocurrency – BetaNews

The fact that cybercriminals like to be paid in Bitcoin to unlock encrypted files or sell private information gives the impression that criminals must be major users of cryptocurrency. However, a new report from the European Commission suggests that the reality is very different.

Criminal organizations rarely use cryptocurrency (or, as the European Commission calls it, virtual currency) for illegal activities, like financing terrorism and money laundering, because it requires a certain level of technical expertise that hampers adoption.

The European Commission says that criminals have displayed "high intent" to use cryptocurrency in their activities, because it affords a certain degree of anonymity and it is relatively easy to transfer, but, at least right now, the"amounts of money laundered via virtual currencies are quite low."

On top of the expertise required in handling cryptocurrency, criminals too are not very fond of the market's volatility, which can see major spikes in either direction in a narrow time frame, at least when it involves money laundering.

When it comes to financing terrorism, the European Commission has found that there is a "limited but increasing number of cases related to [terrorist financing] through [cryptocurrency]," but, again, the "knowledge and technical expertise" that this requires "has a dissuasive effect on terrorist groups."

In both cases, the European Commission sees the fact that there are no regulations in place as the biggest vulnerability related to cryptocurrency. "There are no controls in place and no common rules in the EU to ensure that VCs [virtual currencies] providers apply AML/CFT [Anti Money Laundering/Combating the Financing of Terrorism] requirements. The international cooperation is non-existent. New risks and opportunities may emerge with FinTech/RegTech."

To learn more, feel free to read the full report.

Image Credit: Lightboxx/Shutterstock

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Criminals rarely use cryptocurrency - BetaNews