Europol has warned that “money launderers have evolved to use cryptocurrencies in their operations”, urging EU member states to equip investigators with the skills to adequately probe such crimes.
The EU’s law enforcement agency presented its fifth annual Internet Organised Crime Threat Assessment (IOCTA) report at the annual Interpol-Europol Cybercrime Conference in Singapore.
The report gives an overview of emerging threats and key developments in cybercrime while also highlighting issues that could be problematic in the coming years.
“The abuse of cryptocurrencies by cybercriminals continues to play a pivotal role in the commission, perpetration and monetisation of cybercrime. They remain the primary payment mechanism for the payment of criminal services, a plethora of goods on darknet markets and for extortion demands, whether as a result of ransomware, DDoS attacks or other methods,” Europol pointed out.
It argued that while the criminal abuse of cryptocurrencies remained largely within the realm of cybercrime, some member states had also reported they were increasingly encountering the use of the currencies by non-cyber organised crime groups.
These warnings come just two months after the Maltese Parliament had enacted legislation governing cryptocurrency exchanges and companies and the regulation of the blockchain sector.
The laws were termed by the government as pioneering, with Malta being actively marketed as “the blockchain island” overseas.
Some of the biggest cryptocurrency exchanges relocated to the island in recent months. Among them was Binance, which has already teamed up with the Malta Stock Exchange to help support fintech start-ups and entrepreneurs.
Despite this, Maltese banks remain reluctant to do business with companies in the sector and Bank of Valletta, for instance, is refusing to accept trading in cryptocurrencies.
Contacted for a reaction to the Europol’s assessment, a spokeswoman for the Parliamentary Secretariat for Financial Services, the Digital Economy and Innovation said the government was looking at distributed ledger technology in a “very holistic way”, referring to the three laws approved in July.
“This space is currently unregulated in both the EU and other third countries. Malta is first to have put in place a legislative framework that will put legal certainty around this technology and its various uses.
“The legal framework will also put in place robust mechanisms to combat abuse and money laundering,” the spokeswoman said, adding that a working group was set up to focus on anti-money laundering in this sector.
This, the spokeswoman noted, would go “even beyond” the EU’s fifth anti-money laundering directive.
No replies, however, were forthcoming on the Europol’s recommendation to member states to equip their investigators with the skills to be able to probe crimes in this sector and if Malta was looking into this.