European Police Forces Want Tougher KYC Measures for Cryptocurrency

European Police Forces Want Tougher KYC Measures for Cryptocurrency

Unexpectedly, Europol, the EU’s law enforcement cooperation agency, has called on EU member states to pressurize crypto businesses to enforce tighter know-your-customer (KYC) policies. In addition, the organization wants exchanges to communicate more with regulators to combat what it believes is a rising crime wave powered by cryptoassets and privacy wallets.

According to the Internet Organized Crime Threat Assessment report, published on October 5, Europol claimed that the dark web has become increasingly reliant on encrypted email services, privacy-enhanced cryptoassets and bulletproof hosting (BPH) – posing a significant pressing problem for law enforcement agencies across the globe.

Nevertheless, Europol expressed positivity about the way European crypto companies have attempted to stem the laundry of illegal proceeds, speaking of a “massive effort” from within the industry of digital currencies. “The [crypto] industry and exchanges, in particular, have continued strengthening their KYC measures, either through their increasing effort to identify rogue clients or by a growing set of legislation affecting the industry,” wrote the report’s authors.

However, Europol claimed that the above affirmations were not true of all crypto exchanges, which, it stated, “still differ in the degree to which they address the issue and the level of assistance they provide to investigators.” Europol pointed out that it is currently carrying out the world’s first international law enforcement survey to focus on corporation with major crypto exchanges and payment services – as part of an attempt to assess the crypto industry players’ compliance levels. In his own words, the author added, “[Cryptoassets] continue to facilitate payments for various forms of cybercrime, as developments evolve with respect to privacy-oriented crypto coins and services. [On the dark web] there “has been an increase in the use of privacy-enhanced cryptoassets and an emergence of privacy-enhanced coinjoin concepts, such as [wallet providers] Wasabi and Samourai.”

Still according to Europol, below are some of the other challenges that hamper European police forces’ crypto-related investigations:

  • the use of privacy coins
  • centralized and decentralized mixing services
  • centralized and decentralized mixing services
  • clandestine over-the-counter trading
  • clandestine over-the-counter trading

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