The European Commission has released a new report which suggests that while organized criminals would like to use cryptocurrencies, they don’t because of their lack of knowledge in the technology. The findings are quite surprising as Bitcoin is mainly known for facilitating criminal activities.
The report reads:
“Few investigations have been conducted on virtual currencies which seem to be rarely used by criminal organizations. While they may have a high intent to use due to [virtual currencies] characteristics (anonymity in particular), the level of capability is lower due to high technology required.”
The main criminal activities that the report highlights are terrorist financing and money laundering. While criminals are put off from using these currencies because of the technical skill that is required, the report still suggests a number of measures to mitigate cryptocurrency’s use for criminal activities like:
- The Commission would issue a report to be accompanies, if necessary, by proposals, including, where appropriate, with respect to virtual currencies, empowerment to set-up and maintain a central database registering users’ identities and wallet addresses accessible to FIUs, as well as self-declaration forms for the use of virtual currency users.
- The Commission will continue to monitor in the context of the SNRA the risks posed by FinTech/RegTech, crypto-to-crypto currency exchanges, and use of virtual currencies for purchasing of high value goods.
The proposals from the report which suggests the EU should have a legal framework for monitoring cryptocurrencies will undoubtedly draw criticism from privacy advocates and users of cryptocurrencies.