Europol

Europol Says Up To £4 Billion Is Being Laundered By Using Cryptocurrencies

Europol Says Up To £4 Billion Is Being Laundered By Using Cryptocurrencies

Europol Says Up To £4 Billion With Cryptocurrencies

Europol, a European Agency for Law Enforcement Cooperation, claims that up to £4 billion is being laundered by criminals using cryptocurrencies. Moreover, the agency believes that between 3-4% of the total £100 billion generated from illegal sources throughout Europe has been laundered using digital currencies. Rob Wainwright, Europol’s director, would like crypto-experts and regulatory authorities worldwide to launch a joint effort which will crackdown on these illicit activities. His agency is quite concerned and warns that this problem is “growing quite quickly”.

Mr. Wainwright goes on to point out that law enforcement agencies cannot effectively manage transactions that occur using cryptocurrencies, because there’s no central authority involved such as banks or financial institutions. He also mentions that even if criminal activity is detected, assets cannot be frozen like they can in a traditional banking system.

“Money Mules” Used To Launder Money

In order to carry out this illicit activity, a hard to track method is being used. This method first converts all the money made illegally to Bitcoins. The Bitcoins are then distributed in “tiny chunks” to individuals who have no clear connection with the actual criminals. However, these people, who are now being called “money mules”, are willing to “carry” the Bitcoins, probably in exchange for a nice bit of cash. After receiving the Bitcoins, these “money mules” convert the Bitcoins back to fiat currency and hand it over to the criminals.

Mr. Wainwright explains that, “It’s very difficult for the police in most cases to identify who is cashing this out”. What’s even more disturbing is that Europol believes money “in the billions” obtained from selling drugs on the streets is increasingly being converted to cryptocurrencies. This is probably a “very large-scale” operation and Mr. Wainwright has called on the architects of crypto-technology to assist in tackling this growing problem.

Europe Plans To Introduce More Cryptocurrency Regulations

Police in the UK have not yet formally addressed the issues related to this disturbing trend. However, the Parliament has indicated that regulations need to be put in place in order to help track any suspicious activity. Since the last few months, the Treasury Select Committee has been studying cryptocurrencies, and is pressing for regulations throughout the European Union which will require crypto-traders to verify their identities.

Alison McGovern, a British Labour party politician who’s also active on the Committee, has been pushing for an investigation into digital currencies. She states, “I think that [investigation] will draw the attention of the Treasury and the Bank [of England] and others to how we put in place a regulatory system”. According to Ms. McGovern, the European community has not acted fast enough to this growing threat, and needs to address this issue before it gets more out of control.

Finding A Solution

A key thing to note here is that cryptocurrencies are not the “culprit”, and for every problem, there’s usually a solution. Almost every great invention has the potential to be used in a harmful and unlawful manner. For instance, the internet is one of humanity’s greatest inventions. However, we all know how it can and has been used to help in orchestrating some of the worst and sophisticated crimes.

Obviously, this doesn’t mean that we should stop using the internet or ban its use entirely. Instead, law enforcement agencies worldwide should work towards developing a system to combat cybercrime, which they’ve already been doing for a number of years. This same system can be extended and used to tackle crime involving Bitcoin and other cryptocurrencies.

2 Comments

    1. Author

      Could you be more specific about what you mean?

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