Tracing of cryptocurrencies transactions related to criminal purposes

ExpectedOutcome:

Projects’ results are expected to contribute to all of the following outcomes:

• The attractiveness of use of cryptocurrencies by criminals and terrorists is limited, with better tractability of cryptocurrency transactions;
• Lawful tools and methods for Police Authorities to better trace virtual currency transactions related to criminal activities;
• Recommendations are provided for better regulation of the cryptocurrencies market as well as for better regulation of the exchange of transnational information on funds transfers, harmonizing and promoting standards to enhance the tracing of money flows in the context of criminal investigations; and
• Modern training curricula for Police Authorities, Prosecutors, as well as judicial actors are developed on tracing, seizing and handling cryptocurrencies in the course of investigation.

Scope:

Cryptocurrencies are a widely used method by criminals, including terrorists, to transfer or conceal funds due to their anonymity, ease of use and lack of international borders and restrictions (exactly same aspects that make use of traditional bank routes difficult for them). With the raise of crime-as-a-service market, and growth in the number of connected transactions, use of cryptocurrency as one of the money laundering typology better tracing of cryptocurrency transactions is crucial to keep the ground in the fight against crime and terrorism. On top of it all, clandestine cryptocurrency activities are increasingly facilitated by new developments such as high privacy decentralised exchanges, which while used by perpetrators frustrate the efforts of Police Authorities to detect and recover criminal assets as well as to prevent fraudulent transactions. The future of cryptocurrencies and the extent to which criminals and terrorists will use them will depend on factors such as anonymity, future regulation, law enforcement activities and security of the systems. Innovation should explore these considerations and propose mitigation measures, from legal, organisational, and technical perspectives (including the development of tools and relevant trainings to enhanced tractability of cryptocurrencies transactions. Proposals should also propose cooperation model(s) and tools for the exchange of information between relevant authorities.

The successful proposal should build on the publicly available achievements and findings of related previous national or EU-funded projects. Coordination among the successful proposal from this topic as well as with the successful proposals under topic HORIZON-CL3-2023-FCT-01-06: Crime as a service should be envisaged to avoid duplication, and to exploit complementarities as well as opportunities for increased impact.

Proposals funded under this topic are expected to engage with the Europol Innovation Lab during the lifetime of the project, including validating the outcomes, with the aim of facilitating future uptake of innovations for the law enforcement community.

In this topic the integration of the gender dimension (sex and gender analysis) in research and innovation content should be addressed only if relevant in relation to the objectives of the research effort.

Specific Topic Conditions:

Activities are expected to achieve TRL 6-7 by the end of the project – see General Annex B.