Copyright Decrypt
The head of Europol's European Financial and Economic Crime Centre (EFECC), Burkhard Mühl, warned this week that the misuse of crypto and blockchain for criminal purposes is “becoming increasingly sophisticated,” as he pledged continued investment from Europol to support member states in complex and international investigations. “Investigating these crimes places a significant burden on the law enforcement agencies of EU member states,” he added. His comments came during the 9th Global Conference on Criminal Finances and Crypto Assets from Oct. 28-29, jointly organised by Europol, the United Nations Office on Drugs and Crime (UNODC), and the Basel Institute on Governance, and focused on the evolving ways that crypto assets and blockchain are being misused for crime. While representing only a small segment of the overall proceeds of financial crime, the Chainalysis 2025 crypto crime report, released in January, gave a lower estimate of $40.9 billion in value received by illicit cryptocurrency addresses in 2024. The figure excludes traditional crimes such as drug trafficking, where crypto is used merely as a payment or laundering tool. Europol has coordinated several major takedowns this year, including the dismantling of a cybercrime network in Latvia that laundered more than $330,000 through cryptocurrency, a clandestine hawala banking network that laundered over $23 million using crypto, and a "crypto investment fraud ring" that profited almost $540 million from more than 5,000 victims. Europe has also been hit by a spate of so-called wrench attacks, which involve physical assaults on cryptocurrency holders to compel them to hand over their private keys to their wallets. In particular, France has seen 16 such attacks this year alone, according to a record of “Known Physical Bitcoin Attacks” kept by Jameson Lopp. The challenges for many police forces in targeting crypto-related crime lie in its global nature, and the need for cross-border cooperation in operations that sometimes can be difficult to bring about. For example, victims of hacks or scams in Europe may be targeted by people running operations out of elsewhere. Challenges also remain in how law enforcement and the private sector investigate crimes too. Among them, investigators say the lack of harmonized standards remains a serious hurdle. Diana Pătruț, project manager at the Blockchain Intelligence Professionals Association (BIPA), told Decrypt that varying analytics companies often produce inconsistent tracing results, complicating cross-border collaboration. “Our stakeholders have articulated that different blockchain analytics firms produce different results when tracing transactions. There has also been no standardization for wallet attribution, methodology, training, and formatting, making cross-border investigations especially challenging,” Pătruț said. “We are really at the beginning of this process and to make any real progress, we need to encourage more dialogue,” she said, “so that we can get stakeholders from both the public and private sectors to come together to develop these standards jointly and, more importantly, to adopt them wholeheartedly.” Pătruț added that training also remains an area that needs work. “The biggest issue we see at the moment is that blockchain intelligence training appears to be primarily driven by private sector solutions, and this creates the confirmation bias, herding trainees to specific commercial solutions and methodologies, without necessarily understanding or appreciating their underlying application,” she explained. Pătruț suggested that there’s a “need for investigators and financial institutions to develop their own critical assessment capabilities,” and specifically called out a “skills gap” in regard to open-source tools and the technology underpinning crypto. Pătruț also cautioned against oversimplifying what qualifies as a “crypto-related” crime, and comparing the scale of crypto crime compared to traditional financial crime. “Because there are no universally-accepted definitions when it comes to what constitutes a crypto-related crime, it is hard to determine whether crypto-crime is significantly more widespread when compared to traditional financial crime, and there is a risk of narrative capture, depending on the agenda of those observing the data,” she said. “It would probably be more helpful to look at financial crime in general, and recognize that crypto-related crime plays a significant and growing role, and one that must continue to be managed, as crypto-assets, stablecoins, and tokenized assets enter the mainstream financial markets.”
