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Law enforcement agencies in the European Union are alleging that the growing use of digital currencies is impairing their efforts.

Europol, the EU's top police agency, and Eurojust, an agency focused on cross-border judicial matters, released a joint paper on 13th March that outlines a series of cybercrime challenges they face. According to the paper, 2016 was a year that saw a rise in the number of investigations involving the tech, though the agencies didn't provide specific figures.

Yet that usage is having a material impact, according to Europol and Eurojust.

The agencies state in the paper:

"...the widening criminal use of decentralised virtual currencies and the increased use of tumbler/mixer services, effectively prevent law enforcement to ‘follow the money’ and significantly complicate the possibilities for asset recovery and the prevention of fraudulent transactions."

It's a significant admission from the Europol perspective, as the agency regularly partners with others on education and training efforts. (It inked a cooperative deal with blockchain analytics startup Chainalysis in early 2016.)

The paper also comes as lawmakers in the economic bloc are advancing legislation that could lead to the creation of a central database retaining information about digital currency users.

The two agencies later outline how a lack of cohesive legislation about digital currencies – and an absence of case law – further hamper law enforcement efforts.

"Case law (jurisprudence) can be a valuable tool to compensate for a lack of specific legislation, but unfortunately little case law exists with regard to new developments (eg virtual currencies, anonymization tools and various technology-driven criminal modi operandi)," the paper concludes.

European flag image via Shutterstock

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