On September 9, 2016, Europol, INTERPOL, and the Basel Institute on Governance joined forces. The three institutions established a partnership centered around money laundering and digital currency. “There is a clear consensus that digital currencies pose a money laundering and terrorism financing threat,” the press release stated.
While Europol and INTERPOL are household names, the Basel Institute on Governance may not be. The Basel Institute on Governance is an independent organization that works to counter corruption and other financial crimes and to improve the quality of governance.
Part of the reason behind the partnership:
There is a clear consensus that digital currencies pose a money laundering and terrorism financing threat. A small number of cases have already shown Law Enforcement Agencies that money laundering and terrorism financing can easily take place inside virtual environments, offering high levels of anonymity and low levels of detection removing many of the risks associated with real-world money laundering and terrorism financing activities.
After the Paris attacks in November last year, European Union officials issued a “crackdown” on anonymous payments made online. Fingers were pointed at digital currencies like Bitcoin, even though there was no evidence to support the claims. Europol was interestingly on the side that believed digital currencies were of no importance to terrorist funding.
Europol published a report in 2016 stating that digital currencies played no role in terrorist financing. “Despite third party reporting suggesting the use of anonymous currencies like Bitcoin by terrorists to finance their activities, this has not been confirmed by law enforcement.” The study also found that the methods behind funding terrorist organizations had not ever fundamentally changed.
A March 2015 report from Her Majesty’s Treasury Department of the UK concluded nearly the same. The report found little to no evidence indicating that digital currencies play any role in terrorist financing.
According to the press release, the group will aim to:
• gather, analyse, and exchange non-operational information regarding the use of digital currencies as a means of money laundering, and the investigation and recovery of proceeds of crime stored in the same form;
• organise annual workshops and meetings for the representatives of the above mentioned Law Enforcement Agencies and institutions to increase the capacity to successfully investigate crimes in which virtual currencies are involved;
• create a network of practitioners and experts in this field, who can collectively establish best practices and provide assistance and recommendations inside and outside the working group;
“Among these technologies, digital currencies are already transforming the criminal underworld,” Europol writes