Benzinga – A report funded by the European Commission has urged stricter identity verification for users of cryptocurrency exchanges in an effort to combat the increasing use of darknet marketplaces for purchasing illegal substances.
The study, commissioned by the European Union’s European Monitoring Centre for Drugs and Drug Addiction, comes as lawmakers in the region advocate for more rigorous anti-money laundering measures for cryptocurrency transactions. The report also suggests that enhanced police training could be more effective than outright prohibitions.
The authors of the report, Kim Grauer and Eric Jardine from Chainalysis, emphasize the importance of countries worldwide implementing recommendations from the Financial Action Task Force.
This would ensure that users of exchanges, brokers, and ATMs can be identified when cashing out illicit earnings.
Also Read: Distrust In Crypto Skyrockets: Have Americans Abandoned The Future Of Finance?
Chainalysis is a blockchain research platform that offers blockchain analytics solutions to regulators and has contracts worth millions of dollars with U.S. government agencies.
The use of darknet marketplaces remains persistent and continues to grow despite enforcement efforts, according to the report.
Banning cryptocurrency usage entirely has limited effect on curbing darknet activities, and law enforcement shutdowns, such as the Hydra closure in 2022, often only have short-term impacts as alternative platforms emerge to replace them, according to Chainalysis.
The report also emphasizes that investigators can enhance their response capabilities through improved training.
The study highlights the need for law enforcement to “receive training on the technologies being used and the new investigative techniques necessary for conducting these types of investigations.”
This includes acquiring skills in using encrypted platforms and learning how to trace and seize cryptocurrencies.
Read Next: Unstoppable Bitcoin Reigns Supreme With Incredible Inflows, Dominating Altcoins Like Uniswap, Polkadot, Polygon
Photo via Shutterstock.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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