Layertwo's Complicating the Crypto Money Trail: EU Innovation Hub

IconCryptoNewsTerminal Staff11 Jun, 2024

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Layertwo's Complicating the Crypto Money Trail: EU Innovation Hub

Mixing, made possible through platforms like "Layer 2 blockchains, privacy coins, and mixers", has become a growing concern in the cryptocurrency space as it can make it harder to trace illicit funds - making these platforms attractive to criminals. A report published by the European Union's (E.U.) Innovation Hub for Internal Security alongside Europol and Eurojust has warned that "Layer 2 solutions such as the lightning network may not disclose the amount and timing of transactions, which could be exploited by criminals. Privacy coins like Monero and mixers like Tornado Cash also make it more difficult to trace illicit cryptocurrency." The French financial markets regulator Autorité des Marchés Financiers (AMF) also recently published a report highlighting the risk of money laundering in crypto due to the anonymity offered by mechanisms such as mixing.

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