Criminal Crypto Use Is Becoming ‘Increasingly Sophisticated’, Says Europol

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 to continue investment by Europol to support member states in complex and international investigations.

“The investigation of these crimes places a significant burden on the law enforcement agencies of EU member states,” he added.

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

While it represents only a small segment of the overall proceeds of financial crime, the Chainalysis 2025 crypto crime report, released in January, it gave a lower estimate of $40.9 billion in value received from illicit cryptocurrency addresses in 2024. The figure excludes traditional crimes, such as drug trafficking, where crypto is only used as a payment or laundering tool.

Europol has coordinated several major takedowns this year, including the dismantling of a cybercrime network in Latvia that washed up more than $330,000 through cryptocurrency, an underground hawala banking network that washed up over $23 million using crypto, and a “crypto investment fraud ring.” profit nearly $540 million from more than 5,000 victims.

Europe has also been hit by a series of so-called key 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 record of “Known Bitcoin Physical Attacks” viewed by Jameson Lopp.

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

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

“Our stakeholders have articulated that different blockchain analytical companies produce different results when tracing transactions. There has not been standardization for wallet allocation, methodology, training and format, making cross-border investigations particularly challenging,” Pătruț said.

“We are really at the beginning of this process and to make real progress, we need to encourage more dialogue,” he said, “so that we can have the public and private sector actors come together to develop these standards together and, more importantly, to adopt them wholeheartedly.”

Pătruț added that training also remains an area that needs work.

“The biggest problem we see at the moment is that the training of blockchain intelligence seems to be mainly driven by private sector solutions, and this creates confirmation bias, leading trainees to specific commercial solutions and methodologies, without necessarily understanding or appreciating their underlying application,” he explains.

Pătruț suggested that there is a “need for researchers and financial institutions to develop their critical evaluation skills”, and he specifically called a “skills gap” regarding open-source tools and technology that support cryptography.

Pătruț also warned of the oversimplification of what is described as a “crypto-related” crime, and compared the scale of cryptographic crime compared to traditional financial crime.

“Because there is no universally accepted definition when it comes to what constitutes a crypto-related crime, it is difficult to determine if cryptographic crime is significantly more widespread when compared to traditional financial crime, and there is a risk of narrative capture, depending on the agenda of those who observe the data,” he said.

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