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Europol’s 2020 Internet Organized Crime Threat Assessment: Privacy Wallets, Coins, Open Marketplaces as ‘Top Threats’

According to a report by the European Union’s law enforcement agency, “privacy-enhanced wallet services using coinjoin concepts have emerged as a top threat in addition to well established centralized mixers.”

Europol’s report also included decentralized marketplace protocols as a “high priority threat”, specifically naming OpenBazaar, developed by cryptocurrency software company OB1, noting “thousands of downloads on Android” for the company’s mobile platform Haven.

On 29 April 2020, the Polish National Police searched six locations in five Polish regions and arrested five individuals believed to be members of the hacking group InfinityBlack. Police seized electronic equipment, external hard drives and hardware cryptocurrency wallets, all worth around €100 000. The police closed down two platforms with databases containing over 170 million. The hacking group created online platforms to sell user login credentials known as ‘combos’. The group was efficiently organised into three defined teams. Developers created tools to test the quality of the stolen databases, while testers analysed the suitability of authorisation data. Project managers then distributed subscriptions against cryptocurrency payments, according to the report.

“Criminals have started to use other privacy-focused, decentralized marketplace platforms, such as OpenBazaar and Particl.io to sell their illegal goods,” the report says.

For ICO, Europol’s report said: “Although Initial Coin Offering scams and a wide range of Ponzi schemes abusing the increasing popularity of cryptocurrencies dominated criminal abuse by volume, most of the crimes reported to law enforcement included various forms of extortion. The last two years have seen an increase in extortion spam, where the suspect attempts to frighten the victim with a promise of a devastating event should they not receive payment in cryptocurrency, typically bitcoin corresponding to hundreds or even thousands of euros. While in its most basic form the suspect simply expects naïve victims to trust the threat, a slightly more advanced approach includes victims’ passwords, typically leaked from one of the large public data breaches”.

In terms of payment options, bitcoin remains the Darkweb’s most popular method, the report says, “mainly due to its wide adoption, reputation, and ease of use.” But “monero is gradually becoming the most established privacy coin for Darkweb transactions, followed by zcash and dash.”

The number of cryptocurrency automated teller machines (ATMs) is continuously growing and surpassed 9 000 ATMs around the world in 202017. Traditionally, ATMs have often been perceived as a way to privately obtain or sell cryptocurrency. Nevertheless, compliance also gradually improves, as an increasing number of operators require customer identification and flag suspicious transactions.

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