No link between cryptocurrencies and terrorist attacks, despite ‘clear potential’: Europol

Banks, not bitcoin, have facilitated the funding of terrorist attacks conducted in the European Union, the coalition’s top law enforcement agency wrote in a report Wednesday, notwithstanding advantages posed by cryptocurrencies and their “clear potential” for financing extremist activity.

“Cryptocurrencies represent a source of opportunity for terrorist groups, allowing them to move funds across borders while avoiding the regular banking scrutiny,” Europol said in a 72-page assessment on internet organized-crime.

“Yet despite the clear potential, none of the attacks carried out on European soil appear to have been funded via cryptocurrencies. The use of cryptocurrencies by terrorist groups has only involved low-level transactions their main funding still stems from conventional banking and money remittance services,” the report said.

Terrorism aside, cryptocurrencies — especially bitcoin — continue to “play a pivotal role in the commission, perpetration and monetization of cybercrime,” Europol noted.

Cryptocurrencies “remain the primary payment mechanism for the payment of criminal services, a plethora of goods on Darknet markets and for extortion demands,” the report said.

“While the criminal abuse of cryptocurrencies remains largely within the realm of cybercrime, some Member States reported that they are increasingly encountering their use by non-cyber OCGs,” or “organized crime groups,” the report said, adding that Spanish authorities arrested 11 people this year in connection with an alleged drug trafficking and money laundering ring.

Extremists including the Islamic State terrorist group and its sympathizers have participated in fundraising campaigns relying on cryptocurrencies, but Europol failed to trace those donations to any specific attacks, the report said.