The latest IOCTA report shows that privacy-oriented old coins are a growing cyber-threat
Nevertheless, the criminal use of old coins accounts for only 1.1% of all transactions
Monero, Dash and Zcash are becoming increasingly popular as privately held digital assets
Privacy coins have an increased focus on security and are designed to keep users’ identities as private as possible. In this article we will look at the challenges that data protection coins face today and the question of which are currently the best privately oriented crypto currencies.
Fundamental analysis: Europol and the DOJ identify data protection coins as top cyber threats
The European Union’s law enforcement agency Europol described Altcoin Monero (XMR) as one of the biggest cyber threats. Monero is known for its enhanced privacy, making transactions more difficult to track.
Europol works with EU member states, third countries and the private sector to investigate the use of old coins and wallet services. Research has focused on areas such as cyber crime, sexual exploitation of children and payment fraud. The European Center for Cybercrime (EC3) publishes its most frequent report on the main cybercrime threats – the Internet Organized Crime Threat Assessment (IOCTA)
This latest IOCTA report showed that old coins that focus on privacy are a growing cyber threat. Bitcoin is still the most commonly used payment method in cybercrime, but this is mainly due to its widespread use, status and ease of use.
Apart from the old coins we mentioned earlier, Etherum (ETH) and Litcoin (LTC) are also becoming increasingly popular for cybercrime services. The report also noted that cybercriminals make extensive use of “privacy-based wallet services using coin-join concepts” and centralized mixers that help them hoard and launder money.
These coin-join services are used to mix several different transactions from unrelated actors into a single transaction, making it much more difficult to track them down even if they do not delete the transaction history.
According to the report, Dark Web users also use these privacy enhanced wallets to make payments underground. In the summer, Europol published a report that found that cyber criminals had dropped more than $50 million worth of data protection coins into these wallets.
In addition to finding that old coins are widely used by cybercriminals, the Europol report also pointed to the increased use of crypto-currencies in legitimate transactions. More precisely, the criminal use of old coins accounts for only 1.1% of all transactions.
Elsewhere, the U.S. Department of Justice also published a report on data protection coins and cybercrime, which again pointed out that data protection coins are widely used in “high-risk activities”.
“The Department regards the use of AECs as a high-risk activity that indicates possible criminal behavior,” the report said. “AECs are often exchanged for other virtual assets such as Bitcoin, which may indicate a technique of stratifying virtual assets for users who are trying to conceal criminal behavior.
The report also stated that owners of privacy coins were able to use mixers, tumblers and chain hopping to disguise the origin of their tokens, thereby compromising AML and CFT.
The report stated that “chain hopping” is “often used by individuals who launder proceeds from virtual currency thefts. This service is based on exchanging one’s own crypto-credits with others who are working on a different network, such as Bitcoin (BTC) and Ethereum.
Among other mixing and swapping services used by cybercriminals to cover their tracks, the DOJ’s report pointed to the secrecy tool called Helix, whose senior official was arrested in February for laundering over $311 million of Bitcoin.
“Operators of these services can be held criminally liable for money laundering because these mixers and tumblers are specifically designed to ‘conceal or disguise the nature, location, source, ownership or control’ of a financial transaction.
3 best privacy-focused crypto currencies
Monero (XMR)
Measured by market capitalization, Monero is the largest digital asset with a focus on privacy. Monero’s Ring Confidential Transactions (RingCT) helps to protect the transaction amount, making it very useful for a variety of activities.
This week, the Monero share price hit a 2-year high near the $140 mark after breaking through the $120 resistance line. XMR buyers are now likely to push the price towards the next resistance line near $160.
Dash (DASH)
Dash currently ranks 29th among the world’s largest digital assets. Dash offers its users the choice of conducting their transactions anonymously or not. Using this feature increases the transaction fee, but helps protect your privacy.
DASH/USD has traded mostly sideways since March and was sold due to a pandemic. However, a break above $85 would pave the way for DASH investors to test the $125 target.
Zcash (ZEC)
Zcash, the world’s 33rd largest digital asset by market capitalization, is another crypto-currency that prides itself on enhanced security and privacy features. The Zero-Knowledge Proof feature enables users to protect transactions, addresses and amounts.
The value of Zcash has doubled in 2020. The price promotion brought a 1-year high in August, before the correction took place, in order to give new ZEC buyers the opportunity to test the $75 resistance.
Summary
Europol and the U.S. Department of Justice have recently published reports that found that privately oriented old coins pose a growing cyber threat. Monero, Zcash and Dash are among the largest and most popular digital assets due to their ability to shield transactions.