In an effort to tackle money laundering through virtual currencies like bitcoin, two prominent law enforcement agencies – Europol and Interpol have announced the establishment of a working group.
An announcement from late last week has confirmed the establishment of a new working group looking into money laundering with digital currencies.
The group is established through a tripartite partnership between Europol – the criminal intelligence agency of the European Union; INTERPOL, a prominent intergovernmental organization that facilitates international police cooperation and; the Basel Institute on Governance, an independent and non-profit think tank.
Noting that digital currencies are “already transforming the criminal underworld”, a press release by Europol stated:
There is a clear consensus that digital currencies pose a money laundering and terrorism financing threat.
The consensus comes despite a report from a Europol report from January 2016 that there was no confirmed evidence of bitcoin or other digital currencies used to finance terrorist activities.
So too, did a March 2015 report [PDF] from Her Majesty’s Treasury Department of the UK, which claimed “little evidence” to indicate that digital currencies played a role in terrorist financing.
Calls for increased oversight and control of digital currencies came to the fore following to last year’s Paris terror attacks. Merely days after the tragedy, interior and justice ministers from the European Union convened a crisis meeting, aiming to strengthen controls of virtual currencies and anonymous payment methods.
The Working Group’s Objectives
While the incidents weren’t revealed, the announcement cites “a small number of cases” that have law enforcement agencies concerned about the possibility of money laundering and terrorism financing within virtual environments. The decentralized nature and the cryptography used to secure transactions pose challenges at a time where there is wider adoption of virtual currencies, law enforcement agencies believe.
As a result, the new working group will look to set tasks on three objectives, the announcement revealed. They are to:
- Gather, analyze, and exchange non-operational information regarding the use of digital currencies as a means of money laundering, and the investigation and recovery of proceeds of the crime stored in the same form
- Organize annual workshops and meetings for the representatives of the above-mentioned Law Enforcement Agencies and institutions to increase the capacity to successfully investigate crimes in which virtual currencies are involved;
- Create a network of practitioners and experts in this field, who can collectively establish best practices and provide assistance and recommendations inside and outside the working group.
The European Council had previously set the agenda to regulate virtual currencies as a means to curbing terrorist funding opportunities, with controls planned toward the end of 2016. The realm of influence will now expand beyond the EU’s borders, due to the participation of Interpol in the working group. It remains to be seen if the new working group would liaison with the newly-approved taskforce – a watchdog that could push the EU’s objective to effectively end the anonymity of bitcoin transactions.
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Last modified: March 4, 2021 4:51 PM