Europol, the European Union’s Law Enforcement Agency recently released a two-part report analyzing the impact of privacy tools in crimes related to cryptocurrency. Privacy tools such as Wasabi wallets are used by individuals to hide the origin of crypto transactions.
The law enforcement agency's report cited recent research by blockchain analysis firm, Chainalysis, which suggested that almost $50 million USD worth of crypto was deposited in Wasabi wallets, and out of this $50 million, at least 30% came from the dark web.
The data is quite worrisome for the investigation agency as earlier transaction volumes on Wasabi only consisted of 1% dark web transactions. Thus, this significant rise in the use of privacy tools could potentially lead to its ban.
Governments Are Increasingly Using Blockchain Monitoring Tools
Bitcoin was previously advertised as a decentralized, privacy-centered cryptocurrency. However, in order for governments to regulate these crypto assets, the first thing they need is complete disclosure, which puts the privacy aspect in jeopardy.
While crypto proponents have been advocating for privacy tools, it has become a point of friction with the government agencies. The government wants to know every detail of the transaction while the privacy advocate believes it’s against the founding principles of cryptocurrencies.
This policy of full disclosure is an unbending demand from government agencies, agencies that are increasingly using blockchain analytics tools like Chainalysis. These tracking agencies can find the actual owner of the transaction despite the use of privacy tools such as Wasabi wallet.
The report from Europol’s European Cybercrime Centre (EC3) was recently leaked on Telegram, with the department later confirming that it was an authentic report meant for “law enforcement only,” The department in a statement said:
“It was written “only for a law enforcement audience,” Europol’s press department told CoinDesk, adding that “the report does not contain any operational information.” Still, it offers a peek into the law enforcement agency’s thinking. “How popular is the service?” the guide reads, answering: “Clearly popular enough to spark our interest.”