Europol’s latest report, titled Internet Organised Crime Threat Assessment (IOCTA), indicates that Bitcoin remains the favored cryptocurrency of cybercriminals, but terrorist groups such as ISIS are shifting to more anonymous cryptocurrencies, like Zcash.

Cybercriminals And Bitcoin

Per the report, relayed by The Next Web, cybercriminals still favor Bitcoin, despite the relative lack of anonymity features, possibly due to the ease of liquidity and acceptance across the globe. Even if criminals prefer to dodge the KYC/AML requirements of most mainstream exchanges, Bitcoin can be spent on the Dark Web readily enough. The latest IOCTA noted:

“The abuse of cryptocurrencies by cybercriminals continues to play a pivotal role in the commission, perpetration and monetisation of cybercrime. … They remain the primary payment mechanism for the payment of criminal services, a plethora of goods on Darknet markets and for extortion demands, whether as a result of ransomware, DDoS attacks, or other methods.”

Europol has also noticed the rise of phishing attacks that target newcomers to the cryptocurrency world who are still learning the ropes. Scams such as the fake Twitter accounts promising “ETH Giveaways” could trick the unwary and uninitiated into giving up their hard-earned cryptocurrency holdings.

Cryptojacking has also been on the rise. Although cryptojacking uses malware to essentially seize computing power for mining cryptocurrency, it is not technically illegal. However, Europol’s report indicates that regulators and law enforcement are becoming increasingly aware of it, so the legality of cryptojacking may not last for long.

Europol’s experts anticipate that cybercriminals will begin ditching Bitcoin in favor of more anonymous cryptocurrencies. This shift may be earmarked by an increase in extortion demands and ransomware. This probably won’t sit well with supporters of coins like Monero and Zcash who may not be using them for illegal activities but may occasionally want to indulge in products and services that they don’t want showing up on a credit card bill.

Terrorists Using Zcash

The anonymous nature of Zcash has been especially attractive to terrorist groups like ISIS. Zcash has been used to finance ISIS’ purchase of domain names, for instance. However, Europol does say that it couldn’t prove that ISIS has ever used Zcash to finance terrorist attacks on European soil.

Europol did recommend an interesting tactic for helping to combat the use of cryptocurrencies to fund terrorism:

“Investigators should identify and build trust relationships with any cryptocurrency related businesses operating in their jurisdiction, such as exchangers, mining pools or wallet operators. … Investigating cryptocurrencies must become a core skill for cybercrime investigators.”

This is a departure from the usual regulatory attitude that exchanges, along with other businesses that operate in the financial industry bear full responsibility for knowing who their customers are (KYC).

Cryptocurrency insiders have gotten used to the idea that regulators see them as the bad actors even when they aren’t spending their crypto on anything blatantly illegal or unethical. Insiders who are also entrepreneurs may refuse to cooperate with Europol investigations if they have reason to believe that cooperation is not in their best interest.

This means Europol may face the uphill battle of convincing businesses in the crypto industry that its investigators aren’t there to make their operations more costly than they are already. If those investigators don’t learn how to ignore the occasional irregularity among these businesses, then they may not make much progress in addressing the problems of cybercrime and terrorist activity that makes good use of crypto and blockchain technologies.