Europol, the law enforcement agency of the European Union (EU), has warned that the virtual currencies Zcash, Monero, and Ethereum are increasingly being used in the digital underground market. The agency, however, reiterated that the leading cryptocurrency Bitcoin is still the preferred currency in cybercrime.
In its 2017 Internet Organised Crime Threat Assessment (IOCTA) report, Europol stated that the darknet landscape is rapidly evolving. The agency concluded that Monero is fast gaining darkweb popularity because of its “additional security and privacy features” making it one of the easy cryptocurrency choices for criminals.
Part of the report reads:
“Cryptocurrencies continue to be exploited by cybercriminals, with Bitcoin being the currency of choice in criminal markets, and as payment for cyber-related extor on a empts, such as from ransomware or a DDoS attack. However, other cryptocurrencies such as Monero, Ethereum and Zcash are gaining popularity within the digital underground”.
The report further detailed the main reason why cryptocurrencies are becoming a favorite among criminals:
“Transactions cannot be attributed to any particular user/address, all coins used in a transaction are ‘hidden’ by default, and transaction histories are kept private.”
Other highlights of the IOCTA report
In its report, Interpol focuses on the popularity of digital currencies on darknet marketplaces. As an example, it cites the case of a Monero-focused ransomware called Kirk that was launched in early 2017.
In the case of Ethereum, the report claimed that smart contracts based on the cryptocurrency could be utilized to legalize payments between crime service providers. It also presented a case of a proposed decentralized darknet market that is designed to operate on the Ethereum Blockchain.
Meanwhile, the document clarified that Zcash is yet to be the subject of a law enforcement investigation. However, the virtual currency is reportedly being eyed by darknet marketplaces due to its privacy features, which hide both the transaction recipient and the transaction amount.
The case of AlphaBay
The biggest darknet market AlphaBay was shuttered by Europol in early 2017. The closure was part of a globally coordinated crackdown on underground markets. However, prior to its shutdown, AlphaBay had already added Ethereum and Monero as payment options, and previously had plans to include Zcash.
While any currency can be associated with any criminal activities, such security issues with cryptocurrencies provide an easy excuse for governing bodies to continually be skeptical about the possible value and security of digital currencies.