The German Federal Ministry of Finance has expressed concern about the increasing use of privacy tokens because of their connection to criminal activities and the difficulty in tracking them.
The ministry's "First Money Laundering and Terrorist Financing National Risk Assessment" for 2018-2019, published on 19 October, contained an analysis to identify existing and future threats to the prevention of money laundering (AML) and terrorist financing (TF) in Germany. The report examines, inter alia, the circulation of cryptographic currencies on the darknet for criminal purposes.
The report distinguishes between pseudo-anonymous and anonymous tokens, noting that pseudo-anonymity allows transactions in public block networks to be analysed and suspicious movements to be assessed, while fully anonymous tokens such as Monero (XMR) and Zcash (ZEC) allow transactions not to be detected and are therefore susceptible to involvement in illegal activities.
Therefore, the Ministry calls for supervision of anonymous cryptographic currencies in the future. Although the market capitalisation of such coins is still relatively low, the report notes that these coins are becoming increasingly popular and accepted on the darknet and may eventually become a real alternative to Bitcoin (BTC).
