Why Europol Blames Bitcoin and Artificial Intelligence for Cybercrime Boom

The use of
cryptocurrencies in various criminal activities has become increasingly
prevalent, according to Europol’s latest Internet Organised Crime Threat
Assessment (IOCTA) report released today (Monday). The European Union’s law
enforcement agency highlights the growing role of digital assets and artificial
intelligence in cybercrime, signaling potential challenges for investigators
and regulators alike.

In its 10th
annual IOCTA report, Europol emphasizes that cryptocurrency adoption among
cybercriminals has expanded beyond traditional use cases, permeating a wider
array of illicit activities. This trend poses significant concerns for law
enforcement agencies struggling to keep pace with rapidly evolving criminal
tactics.

Catherine De Bolle, the Executive Director of Europol

“In 2023,
millions of victims across the EU were attacked and exploited online on a daily
basis. Small and medium businesses were increasingly popular targets for
cyber-attacks, while e-merchants experienced the most digital skimming attacks,”
commented Catherine De Bolle, the Executive Director of Europol. “Adults were victimized
through phishing, investment and romance frauds, and more and more minors were
targeted by child sexual exploitation offenders and online sexual extorters

The report
specifically points to the potential abuse of emerging financial products tied
to cryptocurrencies
Cryptocurrencies

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term. As it suggests, the introduction of Bitcoin
exchange-traded funds (ETFs) has allowed a much larger group of investors to
speculate on cryptocurrencies without the need to physically possess them.

„Scammers
could abuse the rise of ETFs related to cryptocurrencies as people who do not
have extensive experience in cryptocurrency will become increasingly exposed to
them,” commented Europol. “Companies issuing cryptocurrency ETFs will also have
to hold large reserves in cryptocurrency, which might make them valuable
targets for fraudsters.”

Europol’s
findings come amid a backdrop of fragmentation in the cybercrime landscape.
Recent law enforcement actions have forced ransomware groups to splinter and
rebrand, while continuous takedowns of dark web forums have shortened the
lifecycle of criminal online marketplaces. This instability has contributed to
a multiplication of cyber threats, with millions of EU citizens falling victim
to online attacks daily.

Europol actively pursues crimes involving cryptocurrencies.
A recent incident in May led to the arrest of six individuals and the recovery
of €750,000 from a cryptocurrency scam. Last year, the agency also warned about
crimes using DeFi and NFT technologies, though it supports the use of blockchain in enhancing
cybersecurity. Three years ago, Europol dismantled a criminal group responsible for stealing $100 million in cryptocurrencies.

Artificial Intelligence
Helps Scammers

The report
also sheds light on the evolving nature of cybercrime tactics. Multi-layered
extortion schemes have become more common, with stolen data at risk of being
published or auctioned, leading to potential re-victimization. Additionally,
the assessment notes a concerning trend of underage offenders engaging in
cybercriminal activities, some of whom are already leveraging artificial
intelligence (AI) tools.

“Cybercriminals
are keen to leverage
Leverage

In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders

In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders
Read this Term Artificial Intelligence, which is already becoming a
common component in their toolbox and is very likely to see even wider
application. Law enforcement agencies are expected to build a robust capacity
to counter the growing threats stemming from this, both in terms of human
resources and technical skills,” added De Bolle.

Looking
ahead, Europol anticipates that AI-assisted cybercrime will pose growing
challenges, particularly in the realm of child sexual abuse material (CSAM).
The agency warns that AI-altered and completely artificial CSAM will complicate
investigations, making it harder to identify victims and perpetrators.

A report
from Finance Magnates this April indicated that nearly 50% of companies are
targeted by AI-generated deepfakes. The payment, money transfer, and personal
banking sectors are particularly vulnerable to cybercrime in this regard. As
scammers increasingly utilize AI for malicious purposes, companies like
Mastercard are employing this technology to shield consumers from fraud,
especially significant as the annual cost of cybercrime is projected to reach
$10.5 trillion next year.

What to Expect in the Near
Future

Based on
the information provided in the IOCTA 2024 report, there are 7 key developments
to expect in the near future regarding cybercrime and digital threats:

• Increased
  AI-assisted cybercrime: AI tools are becoming more prevalent in criminals’ toolboxes, with a
  particular concern for AI-assisted creation of child sexual abuse material
  (CSAM).
• Rise in
  AI-altered and artificial CSAM: This trend will pose growing challenges for law enforcement in
  identifying victims and offenders, as well as managing the increased volume of
  CSAM in circulation.
• Expanded
  use of cryptocurrencies in various crime areas: Digital assets are expected to play a more
  significant role across a wider spectrum of criminal activities.
• Potential
  abuse of cryptocurrency-related financial products: The report warns that scammers could exploit
  the rise of exchange-traded funds (ETFs) tied to cryptocurrencies.
• Continued
  fragmentation of cyber threats: Due to law enforcement actions and market instability, cybercriminal
  groups are likely to continue splintering and rebranding, leading to a
  multiplication of threats.
• Increased
  use of multi-layered extortion tactics: Criminals are expected to continue employing
  complex extortion schemes, including the threat of publishing or auctioning
  stolen data.
• Growing
  challenges related to end-to-end encryption (E2EE): The widespread use of E2EE communication
  platforms by offenders will create ongoing difficulties for law enforcement in
  accessing criminal communications.

To address
these mounting digital challenges, Europol emphasizes the need for law
enforcement agencies to stay ahead of the curve. The agency calls for enhanced
knowledge, tools, and legislation to effectively combat evolving cyber threats.

The IOCTA
2024 report serves as a reminder of the dynamic nature of cybercrime and the
critical role that cryptocurrencies now play in this landscape. As digital
assets continue to gain mainstream acceptance, the challenge for law
enforcement to balance innovation with security becomes increasingly complex.

The use of
cryptocurrencies in various criminal activities has become increasingly
prevalent, according to Europol’s latest Internet Organised Crime Threat
Assessment (IOCTA) report released today (Monday). The European Union’s law
enforcement agency highlights the growing role of digital assets and artificial
intelligence in cybercrime, signaling potential challenges for investigators
and regulators alike.

In its 10th
annual IOCTA report, Europol emphasizes that cryptocurrency adoption among
cybercriminals has expanded beyond traditional use cases, permeating a wider
array of illicit activities. This trend poses significant concerns for law
enforcement agencies struggling to keep pace with rapidly evolving criminal
tactics.

Catherine De Bolle, the Executive Director of Europol

“In 2023,
millions of victims across the EU were attacked and exploited online on a daily
basis. Small and medium businesses were increasingly popular targets for
cyber-attacks, while e-merchants experienced the most digital skimming attacks,”
commented Catherine De Bolle, the Executive Director of Europol. “Adults were victimized
through phishing, investment and romance frauds, and more and more minors were
targeted by child sexual exploitation offenders and online sexual extorters

The report
specifically points to the potential abuse of emerging financial products tied
to cryptocurrencies
Cryptocurrencies

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term. As it suggests, the introduction of Bitcoin
exchange-traded funds (ETFs) has allowed a much larger group of investors to
speculate on cryptocurrencies without the need to physically possess them.

„Scammers
could abuse the rise of ETFs related to cryptocurrencies as people who do not
have extensive experience in cryptocurrency will become increasingly exposed to
them,” commented Europol. “Companies issuing cryptocurrency ETFs will also have
to hold large reserves in cryptocurrency, which might make them valuable
targets for fraudsters.”

Europol’s
findings come amid a backdrop of fragmentation in the cybercrime landscape.
Recent law enforcement actions have forced ransomware groups to splinter and
rebrand, while continuous takedowns of dark web forums have shortened the
lifecycle of criminal online marketplaces. This instability has contributed to
a multiplication of cyber threats, with millions of EU citizens falling victim
to online attacks daily.

Europol actively pursues crimes involving cryptocurrencies.
A recent incident in May led to the arrest of six individuals and the recovery
of €750,000 from a cryptocurrency scam. Last year, the agency also warned about
crimes using DeFi and NFT technologies, though it supports the use of blockchain in enhancing
cybersecurity. Three years ago, Europol dismantled a criminal group responsible for stealing $100 million in cryptocurrencies.

Artificial Intelligence
Helps Scammers

The report
also sheds light on the evolving nature of cybercrime tactics. Multi-layered
extortion schemes have become more common, with stolen data at risk of being
published or auctioned, leading to potential re-victimization. Additionally,
the assessment notes a concerning trend of underage offenders engaging in
cybercriminal activities, some of whom are already leveraging artificial
intelligence (AI) tools.

“Cybercriminals
are keen to leverage
Leverage

In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders

In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders
Read this Term Artificial Intelligence, which is already becoming a
common component in their toolbox and is very likely to see even wider
application. Law enforcement agencies are expected to build a robust capacity
to counter the growing threats stemming from this, both in terms of human
resources and technical skills,” added De Bolle.

Looking
ahead, Europol anticipates that AI-assisted cybercrime will pose growing
challenges, particularly in the realm of child sexual abuse material (CSAM).
The agency warns that AI-altered and completely artificial CSAM will complicate
investigations, making it harder to identify victims and perpetrators.

A report
from Finance Magnates this April indicated that nearly 50% of companies are
targeted by AI-generated deepfakes. The payment, money transfer, and personal
banking sectors are particularly vulnerable to cybercrime in this regard. As
scammers increasingly utilize AI for malicious purposes, companies like
Mastercard are employing this technology to shield consumers from fraud,
especially significant as the annual cost of cybercrime is projected to reach
$10.5 trillion next year.

What to Expect in the Near
Future

Based on
the information provided in the IOCTA 2024 report, there are 7 key developments
to expect in the near future regarding cybercrime and digital threats:

• Increased
  AI-assisted cybercrime: AI tools are becoming more prevalent in criminals’ toolboxes, with a
  particular concern for AI-assisted creation of child sexual abuse material
  (CSAM).
• Rise in
  AI-altered and artificial CSAM: This trend will pose growing challenges for law enforcement in
  identifying victims and offenders, as well as managing the increased volume of
  CSAM in circulation.
• Expanded
  use of cryptocurrencies in various crime areas: Digital assets are expected to play a more
  significant role across a wider spectrum of criminal activities.
• Potential
  abuse of cryptocurrency-related financial products: The report warns that scammers could exploit
  the rise of exchange-traded funds (ETFs) tied to cryptocurrencies.
• Continued
  fragmentation of cyber threats: Due to law enforcement actions and market instability, cybercriminal
  groups are likely to continue splintering and rebranding, leading to a
  multiplication of threats.
• Increased
  use of multi-layered extortion tactics: Criminals are expected to continue employing
  complex extortion schemes, including the threat of publishing or auctioning
  stolen data.
• Growing
  challenges related to end-to-end encryption (E2EE): The widespread use of E2EE communication
  platforms by offenders will create ongoing difficulties for law enforcement in
  accessing criminal communications.

To address
these mounting digital challenges, Europol emphasizes the need for law
enforcement agencies to stay ahead of the curve. The agency calls for enhanced
knowledge, tools, and legislation to effectively combat evolving cyber threats.

The IOCTA
2024 report serves as a reminder of the dynamic nature of cybercrime and the
critical role that cryptocurrencies now play in this landscape. As digital
assets continue to gain mainstream acceptance, the challenge for law
enforcement to balance innovation with security becomes increasingly complex.

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