Privacy Coins Can Make Tumblers No Longer Useful

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Bitcoin Crypto between Computer Software.
Europol 2018 report reveals that the increased use of privacy coins is likely to make tumblers obsolete with time.

Even though Bitcoin has the largest market capitalization among other digital assets, it is not known for how long this will be the case because privacy-focused coins are gaining more popularity and they offer a higher level of anonymity as compared to older cryptocurrencies like Bitcoin, Ethereum and others which are traceable.

This, in particular, had made a considerable fraction of Bitcoin users to ditch the asset and use those that are near-impossible to trace.

So to enhance privacy when using altcoins that do not have complete anonymity, tumbling services are used, which play the role of clearing traces of the funds.

By obscuring transactions, shufflers give the sender a new set of coins, and it is this feature that has complicated work to-date for third parties trying to trace the movement of cryptocurrencies.

Tumblers Can Become Obsolete

According to Europol’s 2018 Internet Organized Crime Threat Assessment, it is anticipated that privacy coins will soon become the preference for those undertaking illegal activities and in the end, reducing the need for shufflers.

The report highlights the different types of internet organized crime that have taken root over the year.

Your TOR usage is being watched

If compared to previous years, some of the crimes have remained similar whereas others have changed in a more or less manner.

For example, looking at last year and this year, it is evident that non-cash crime is more prevalent and there are a wide range of factors responsible for the vice.

Digital currency on keyboard.
According to Europol’s 2018 Internet Organized Crime Threat Assessment, it is anticipated that privacy coins will soon become the preference for those undertaking illegal activities and in the end, reducing the need for shufflers.

Among them is how fraudsters use existing tools to ensure that they do not end up exposing their identity.

In the end, they develop more sophisticated tools that are capable of adapting to change, meaning that they will keep doing what they do as time moves on.

Taking a look at Europol’s 2017 Internet Organized Crime Threat Assessment and comparing it to the 2018 publication, there is quite a difference in how tables have turned.

One year, Bitcoin was vastly more popular than other cryptocurrencies in the dark web, but now, we can say that even though the statement holds water, the use of other digital currencies in the darknet has led to a drop in the number of persons using Bitcoin.

On one hand, the use of privacy coins has increased and so has the use of tumbling services.

The rapid rate of advancement has led law enforcement agencies across the world to call for the legislation of the crypto industry.

The other issue pointed out in the Europol report is that criminals still prefer paper money because of its ease to aid financial transactions.

The case is not the same with cryptocurrencies—among the downsides are the fact that it can be quite hectic to make transactions if the crypto exchange has put in place policies to determine the source of funds and the full identity of an individual.

Regulation to Fight Cryptocurrency Crime

Hacker behind a PC trying to steal Bitcoin.
So to enhance privacy when using altcoins that do not have complete anonymity, tumbling services are used, which play the role of clearing traces of the funds.

The adoption of cryptocurrencies differs depending on the location of an individual.

In some countries, crypto-related crime is so rampant that security agencies have called for its regulation in a bid to reduce the associated risks.

For a fact, cryptocurrency is just less than 10 years, and as much as it has its benefits, the drawbacks are quite significant.

These drawbacks have pushed lawmakers and security agencies in countries including the U.S., Japan, Australia, South Korea and many others to come up with a way to prevent the use of privacy-focused coins and decentralized exchanges in illicit activities.

In the U.S., for example, several federal law enforcement agencies are trying to fight non-cash crimes.

Through research and innovation, security agencies can stay up-to-date with the developing tactics employed by cybercriminals, and in the end, staying on top of the game.

Early this year, a leaked memo disclosed that there was a plan by the U.S. Army and the NSA (National Security Agency) to track Monero transactions.

Some months later, the U.S. Secret Service tabled a report to Congress highlighting the need for the regulation of cryptocurrencies.

In the meeting with Congress, other officials took the opportunity to highlight their views on cryptocurrencies, and it is evident that untraceable crypto and mixing services are indeed a problem for the government.

Then there are also policies meant to be followed by cryptocurrency exchanges such as Know Your Customer (KYC) laws, which require them to have all the personal details of their users and also demand to know the source of funds to prevent online fraud.

Bitcoin in handcuffs.
By obscuring transactions, shufflers give the sender a new set of coins, and it is this feature that has complicated work to-date for third parties trying to trace the movement of cryptocurrencies.

For exchanges that do not adhere to specific laws set in a given country, the respective government bodies mandated with the responsibility of overseeing the industry can crack the whip.

In China, for instance, foreign ICO sites and cryptocurrency exchanges have been blocked as a means of curbing crime that may be of high financial risk.

All external websites offering cryptocurrency services were added to the nation’s firewall earlier this year.

Japan is also on the forefront of regulating the cryptocurrency sector, and not long ago, they initiated a ban on privacy coins.

It is surprising that when the crypto era began, Japan was viewed as one of the countries with utmost dedication towards blockchain, but with the high magnitudes of hacks, authorities have tightened the grip.

C.M.

C.M.

With the urge to know more about everything around us, I am an enthusiast researcher and writer with keen interest in expanding my knowledge in a bid to be well versed. Through writing, I express and share my feelings, ideas, and thoughts for like minded individuals.
C.M.
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