In a report released at the end of June, The European Commission suggests that organized criminal elements and terrorists rarely use digital currencies for their illicit schemes. The report’s authors conclude that those groups may have a desire to use Bitcoin and other cryptocurrencies to fuel their activities, but that they often lack the technical expertise needed to make use of the technology.
Where terror financing is concerned, the report notes that there have been terrorist organizations that have used the internet to provide instructions for crypto use, but that there is little evidence that such groups use digital currencies in any widespread manner. To explain that lack of use, the authors acknowledge that “the technology is quite recent and in any case requires some knowledge and technical expertise which has a dissuasive effect on terrorist groups.”
There appears to be little evidence that digital currencies are being used for things like money laundering, either – despite the media hype and panicked calls for action from political leaders around the world. As the report recognizes, digital currencies “are not regulated in the EU and there is little evidence of [them] being misused for ML purposes.”
The report’s assessment of digital currency risks includes a list of proposals to correct these non-issues, of course. In addition to ensuring that exchanges and wallet companies are forced to comply with existing anti-money-laundering regulations, the Commission also proposes a centralized database of crypto users and their wallet addresses – as well as “self-declaration forms” for digital currency users.