It was not too long ago when a US drug enforcement official had said that ratio of Bitcoin’s illegal vs. legal use has completely flipped and the dominant cryptocurrency is no longer being used for the illegal purposes as it was used earlier. Now a similar report is coming out of Europe to open the eyes of regulators sitting in emerging markets. According to a report recently published by Europol, Bitcoin has not been used for funding any of the recent terrorist attacks in Europe.
Yes. A 72-pages long report recently published by Europol that talks about various modules of online crime suggests that Bitcoin is not the primary source of funding for terrorism. Instead, it’s conventional banking that is utilized by terrorists to their advantage. While a handful of sympathizing terrorist groups called for Bitcoin donations in past, they used the funds raised in BTC only for financing their online operations (i.e. server costs and costs of other online infrastructure). According to Europol report:
“… despite the clear potential, none of the attacks carried out on European soil appear to have been funded via cryptocurrencies. The use of cryptocurrencies by terrorist groups has only involved low-level transactions – their main funding still stems from conventional banking and money remittance services.”
The conclusion of the report points out that the use of Bitcoin to finance online infrastructure might’ve been done by terrorists only to get familiar with this new technology. There’s no reason why they would want to ditch their tried and tested financing source (cash) in favor of something that creates a publicly accessible log of every transaction.
The report also suggests that two things are necessary to crack down on terrorism financing. First is closer coordination and information sharing between different law enforcement agencies, and the other is curbing the ability of terrorists to carry out cyberattacks.
Bitcoin’s use in cybercrime
While Bitcoin is not financing terrorism, its use in cybercrime is something that even this Europol report doesn’t deny. In fact, it’s the most commonly (ab)used cryptocurrency in cybercrimes according to Europol. And that is despite its market share dropping to 35% from its peak of 80%.
But it doesn’t mean that other cryptocurrencies are not on the radars of cybercriminals. The report also suggests that privacy coins like Zcash and Monero are likely to be utilized next by cybercriminals across the globe as their use by non-cyber organized crime groups is increasing in some states. The report said in this regard:
“While the criminal abuse of cryptocurrencies remains largely within the realm of cybercrime, some Member States reported that they are increasingly encountering their use by non-cyber [organized crime groups].”