A recent report from Europol, the European Union’s law enforcement agency, highlights the increasing use of technology for illicit financial transactions by criminal organizations. While technology has brought many positive advancements, criminals are leveraging it for various illegal activities, particularly to fund their operations.
The report, titled the European Financial and Economic Crime Threat Assessment, reveals that nearly 70% of criminal networks operating in the EU employ basic money laundering techniques. Some criminal groups also collaborate with professional money laundering networks and use underground banking systems. Additionally, criminals are embracing technologies like machine learning, artificial intelligence (AI), and deepfake technology for financial and economic crimes. Interestingly, the report mentions that criminals have turned to chatbots, such as ChatGPT, to aid in online fraud.
Cryptocurrencies, which are often associated with illicit financial activities, are also discussed in the report. Europol notes that crypto transactions represent less than 1% of the overall transaction volume. Criminals are increasingly hesitant to use cryptocurrencies due to successful law enforcement efforts in seizing illicit crypto assets. Europol has seized substantial amounts of cryptocurrency in recent operations against criminal networks, such as the takedown of ChipMixer in March 2023 and the dismantling of a crypto fraud network in January.
Furthermore, the report highlights the use of Web3 technologies, including decentralized finance (DeFi), non-fungible tokens (NFTs), and the metaverse, by criminals for various illegal activities. It mentions that professionals are providing cryptocurrency-as-a-service for money laundering to criminal organizations lacking technical expertise.
Despite these challenges, there has been a 65% decline in illicit cryptocurrency flows year-to-date compared to the previous year, indicating some success in combating crypto-related criminal activities. Law enforcement agencies are increasingly vigilant in detecting suspicious transactions and identifying actors involved in illicit financial activities.
Overall, the report underscores the evolving landscape of financial and economic crimes, driven by technological advancements and criminal innovation. Law enforcement agencies are adapting their strategies to address these challenges and disrupt criminal networks engaged in illegal financial activities.
By FCCT Editorial Team
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