Criminal crypto use is becoming ‘increasingly sophisticated’, Europol says

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

“Investigating these crimes places a significant burden on the law enforcement authorities of EU Member States,” he added.

His comments came during the 9th Global Conference on Criminal Finances and Crypto Assets from October 28 to 29, jointly organized by Europol, the United Nations Office on Drugs and Crime (UNODC) and the Basel Institute on Governance, and focused on the evolving ways in which crypto assets and blockchain are being misused for crime.

Although it represents only a small portion of total financial crime proceeds, the Chainalysis 2025 crypto crime report shows: issued in January gave a lower estimate of $40.9 billion in value received by illicit cryptocurrency addresses in 2024. This figure excludes traditional crimes such as drug trafficking, where crypto is only used as a payment or money laundering tool.

Europol has coordinated several major actions this year, including the dismantling of a cybercrime network in Latvia laundered over $330,000 through cryptocurrency, a clandestine Hawala banking network that laundered over $23 million using crypto, and a ‘crypto investment fraud’ benefited nearly $540 million from more than 5,000 victims.

Europe has also been hit by a wave of so-called ‘wrench attacks’, which involve physical assaults on cryptocurrency holders to force them to hand over their private keys to their wallets. In particular, France has seen 16 such attacks this year alone, according to a US newspaper file of “Known Physical Bitcoin Attacks” tracked by Jameson Lopp.

The challenges for many police forces in tackling crypto-related crime lie in its global nature and the need for cross-border cooperation in operations that can sometimes be difficult to achieve. For example, victims of hacks or scams in Europe may be targeted by people who carry out their activities elsewhere.

Challenges also remain in how law enforcement agencies and the private sector investigate crimes. Among them, researchers say the lack of harmonized standards remains a serious obstacle. Diana Pătruț, project manager at the Blockchain Intelligence Professionals Association (BIPA), said Declutter that disparate analytics companies often produce inconsistent tracking results, making cross-border collaboration difficult.

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

“We are really at the beginning of this process and to make real progress we need to encourage more dialogue,” she said, “so that we can get stakeholders from both the public and private sectors to come together to co-develop these standards and, more importantly, to adopt them wholeheartedly.”

Pătruț added that training also remains an area where work is needed.

“The biggest problem we see at the moment is that blockchain intelligence training is predominantly driven by private sector solutions, and this creates a confirmation bias, driving trainees towards specific commercial solutions and methodologies, without necessarily understanding or appreciating their underlying application,” she explained.

Pătruț suggested that there is a “need for researchers and financial institutions to develop their own critical assessment capabilities,” specifically mentioning a “skills gap” regarding open-source tools and the technology underpinning crypto.

Pătruț also cautioned against oversimplifying what qualifies as a “crypto-related” crime, and comparing the scale of crypto crime to traditional financial crime.

“Because there are no universally accepted definitions when it comes to what constitutes a crypto-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,” she said.

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