Europol: Privacy protection Bitcoin wallet is not suitable for law enforcement

Europol, the law enforcement authority of the European Union, has its sights set on the famous bitcoin privacy tool Wasabi Wallet.

Bitcoin's Wasabi Wallet often used for criminal purposes

Marked as "law enforcement only", a report divided into two parts of the Europol Cybercrime Center (EC3) analyzed the impact of the privacy tool on the use of the Bitcoin blockchain when investigating criminal events.

"Things are not going well" on the law enforcement side because of this relatively new software, EC3 warned, citing data from leading blockchain analytics firm Chainalysis by estimating the amount of money it filters through Wasabi for purposes. criminals.

"According to [Chainalysis], in the last three weeks, a number of BTC corresponding to almost 50 million dollars have been deposited in Wasabi of which about 30% coming from dark web markets", says the first part of the report, distributed to law enforcement officers in April.

"This is a significant amount, relatively speaking, given that dark web transactions are estimated to have only 1% share of total transactions." Europol's comments highlight a long-overwhelming tension between governments around the world and Bitcoin's privacy advocates.

The blockchain is transparent, making it a useful tool for governments that can intercept accounts and transactions to track down criminals. Privacy advocates, on the other hand, want to make bitcoin transactions more difficult to trace, partly to get more people to join the payment system, but also on principle.

Europol report leaked via Telegram

EC3 is concerned with "fighting crime in the digital age", often online financial crime. His report mainly describes what Wasabi is: a wallet that seeks to circumvent Bitcoin's radical transparency by offering users greater privacy by mixing transactions together and confusing the path.

The second part of the intelligence briefing, released in May, analyzes how a law enforcement officer can try to detect Wasabi transactions on the blockchain and how to use the wallet to make a transaction.

The report leaked recently on Telegram and the Europol press department confirmed its authenticity. It was written "for a police audience only," said the Europol press department, adding that "the report does not contain any operational information."

However, it does offer a peek into law enforcement thinking. "How popular is the service?" the guide reads, and the answer: "Clearly popular enough to arouse our interest."

He wonders if law enforcement agencies can "demix" these transactions, responding that "realistically speaking, in most cases the answer is negative", although there are ways to exploit a potential user error. zkSnacks, the company behind the Wasabi portfolio, was valued at $ 7,5 million in one investment six-figure share of the Canadian listed company Cypherpunk Holdings.