(Funding project: HORIZON-CL3-2024-FCT-01-08 Tracing of cryptocurrencies transactions related to criminal purposes)
Background:
The advent of cryptocurrencies unlocked opportunities for legitimate innovation but at the same time offered a new platform for facilitating criminal and terrorist activities, offering a degree of perceived anonymity and freedom from centralised control and oversight. Law-enforcement agencies (LEAs) face significant challenges in adjusting to the quickly evolving technological developments and emerging applications of cryptocurrencies, cross-border transactions further compounding these challenges. At the same time, legislation in different countries lacks harmonisation and still plays catch-up to the technological developments. Inescapably, to be effective, the response to the emerging (possibly cross-border) cryptocurrency-facilitated criminal/terrorist (CFCT) activities must match their characteristics, i.e. it must evolve continuously both in terms of technology and in terms of operational guidelines and training; moreover it must foster collaboration across international borders and across the different stakeholders on the side of the law (LEAs, regulators, law makers, legitimate cryptocurrency ecosystem and financial sector actors, telecommunication and technology market actors, etc.) and possibly lead to strategic regulatory steps.
Objectives
O1. Conduct an interdisciplinary study of
(i) the current state and emerging trends in Cryptocurrency-Facilitated Crime and Terrorism (CFCT),
(ii) the international regulatory landscape,
(iii) the anti-CFCT landscape (tools, LEA operations, national and international collaboration pathways between LEAs, law-abiding stakeholders, and prosecutors/judicial authorities).
The study will identify strengths and weaknesses based on international experience, both anecdotal and quantitative, and provide evidence-based, impact-assessed recommendations for improving LEA tools and procedures and for refining regulatory provisions.
O2. Deliver improved lawful tools and methodologies shaped by LEA requirements for detecting and investigating indications of CFCT activity (past, ongoing, or planned), identifying involved parties (alongside other investigative means), and tracing funds so they can be seized and processed in accordance with the law. The focus is on interoperability, collaboration facilitation, and alignment with the seven EU requirements for Trustworthy AI.
O3. Engage with LEAs and other relevant stakeholders to build an international federated anti-CFCT dataspace and provide tools that strengthen global cooperation mechanisms offered by INTERPOL and Europol. This includes bringing CFCT-relevant data from lawful actors to LEA agents and developing an ecosystem of tools that interact with the dataspace as consumers, contributors, or both.
O4. Create the world’s first cryptorange and design a collaborative capacity-building methodology, training curricula, and courses for LEAs as well as prosecutors and judiciary. Training will cover CFCT investigations, handling and seizure of illicit cryptocurrency assets, effective collaboration, and multimodal evidence evaluation.
O5. Engage LEAs, Europol (including the Europol Innovation Lab), and INTERPOL to participate in co-design and validation processes for LEA tools, automated benchmarks, and training courses, and to contribute to discussions on regulatory recommendations and broader improvements in the anti-CFCT landscape.
O6. Promote sustainable collaboration between industry, academia, and law-enforcement governmental organisations, and engage with initiatives that share similar objectives
Collaborators
The project is handled by a multi-faceted and very international team of participants, as detailed below
| No. | Short Name | Organisation Name | Country |
|---|---|---|---|
| 1 | ED | European Dynamics | LU |
| 2 | SC | ScoreChain | LU |
| 3 | HSE | Hardware and Software Engineering E.P.E. | GR |
| 4 | IANUS | IANUS Technologies | CY |
| 5 | FUNC | Functori | FR |
| 6 | 21AN | 21 Analytics | CH |
| 7 | AEG | AEGIS IT Research GmbH | DE |
| 8 | CERTH | Centre for Research and Technology, Hellas | GR |
| 9 | ICCS | Research University Institute of Communication and Computer Systems | GR |
| 10 | UZH | University of Zurich | CH |
| 11 | KEMEA | Center for Security Studies | GR |
| 12 | FMI | French Ministry of Interior | FR |
| 13 | CIV | CIVIPOL (associated entity of FMI) | FR |
| 14 | FIMOI | Ministry of Interior, Finland | FI |
| 15 | GMF | Greek Ministry of Finance | GR |
| 16 | CP | Cyprus Police | CY |
| 17 | MP | Moldovan Police | MD |