Criminal use of cryptocurrencies is becoming ‘increasingly sophisticated’, says Europol

The head of Europol’s European Financial and Economic Crime Center (EFECC), Burkhard Mühl, warned this week that the misuse of cryptocurrencies and blockchain for criminal purposes is “becoming increasingly sophisticated”, and pledged continued investment from Europol to support member states in complex, international investigations.

“Investigating these crimes places a significant burden on law enforcement in EU member states,” he added.

His comments came during the 9th Global Conference on Criminal Finance and Cryptoassets on October 28-29, co-hosted by Europol, the United Nations Office on Drugs and Crime (UNODC) and the Basel Governance Institute, and focused on the changing ways in which cryptoassets and blockchain are being misused to commit crimes.

While it represents only a small segment of the total financial crime proceeds, the Chainalysis 2025 Crypto Crime Report, released In January, it gave a lower estimate of $40.9 billion in value received from illicit cryptocurrency addresses in 2024. The figure excludes traditional crimes such as drug trafficking, where cryptocurrencies are used simply as a payment or laundering tool.

Europol has coordinated several major takedowns this year, including the takedown of a cybercrime network in Latvia that washing more than $330,000 through cryptocurrencies, an underground hawala banking network that washing more than $23 million using cryptocurrencies and a “cryptocurrency investment fraud ring” that profited almost 540 million dollars from more than 5,000 victims.

Europe has also been hit by a series of so-called spanner attacks, which involve physically attacking cryptocurrency holders to force them to hand over the private keys to their wallets. In particular, France has suffered 16 such attacks this year alone, according to a record from “Bitcoin Known Physical Attacks” curated by Jameson Lopp.

The challenges for many police forces in combating cryptocurrency-related crime lie in its global nature and the need for cross-border cooperation in operations that can sometimes be difficult to conduct. For example, victims of attacks or scams in Europe may be targeted by people conducting operations from other locations.

Challenges also remain in the way law enforcement and the private sector investigate crimes. Among them, researchers say the lack of harmonized standards remains a serious obstacle. Diana Pătruț, project director of the Blockchain Intelligence Professionals Association (BIPA), said Decipher that different analytics companies often produce inconsistent tracking results, complicating cross-border collaboration.

“Our stakeholders have expressed that different blockchain analytics companies produce different results when tracing transactions. There has also been no standardization for attribution, methodology, training, and wallet format, making cross-border investigations especially challenging,” Pătruț said.

“We’re really at the beginning of this process, and to make real progress, we need to foster more dialogue,” he said, “so we can get public and private sector stakeholders to come together to jointly develop these standards and, more importantly, wholeheartedly adopt them.”

Pătruț added that training also remains an area that needs work.

“The biggest problem we see right now is that blockchain intelligence training seems to be driven primarily by private sector solutions, and this creates a confirmation bias, guiding trainees toward specific business solutions and methodologies, without necessarily understanding or appreciating their underlying application,” he explained.

Pătruț suggested that there is a “need for researchers and financial institutions to develop their own critical assessment capabilities” and specifically pointed out a “skills gap” regarding open source tools and technology underpinning cryptocurrencies.

Pătruț also warned against oversimplifying what is considered a “cryptocurrency-related” crime and comparing the scale of crypto crime to that of traditional financial crimes.

“Because there are no universally accepted definitions as to what constitutes cryptocurrency-related crime, it is difficult to determine whether crypto crime is significantly more widespread compared to traditional financial crimes, and there is a risk of narrative capture, depending on the agenda of those observing the data,” he said.

“It would probably be more useful to look at financial crime in general and recognize that cryptocurrency-related crime plays an important and growing role, and that it needs to continue to be managed, as cryptoassets, stablecoins and tokenized assets enter mainstream financial markets.”