This week started with exciting news for cryptocurrency investors in Europe. This is mainly due to the release of the first detailed report on encryption and security issues in cryptocurrencies, which took place recently. The report is the result of collaboration between various European government agencies, gathered in the so-called European Innovation Hub for Internal Security. To learn more about the origin and role of this network in controlling financial transactions involving cryptocurrencies, NFTs, and digital wallets, as well as the findings presented by the report and their possible consequences for investors in Europe, keep reading.

The European Innovation Hub for Internal Security

Monday’s report was produced by a network of research groups founded in 2021 to ensure management and collaboration between European law enforcement agencies, such as Europol, the Directorate-General for Migration, the Coordination Agency Against Terrorism, Eurojust, and the Agency for the Operational Management of Large IT Systems. As indicated by the agencies in the report, financial transactions conducted with cryptocurrencies have become a major security concern on the continent.

The internal security hub will likely continue to grow due to the significant number of research laboratories it involves. The issues it addresses, as well as the reports it produces, will likely influence the development of policies and legal frameworks aimed at controlling data protection and sharing, as well as protocols for dealing with criminal actions.

The Report

The report is only 53 pages long but is highly detailed. It covers various topics, including an overview of government guidelines created in response to the emergence of new technologies, a comparison between European and international legislation, an introduction to quantum computing, biometric data, domain systems, telecommunications technologies, machine learning, artificial intelligence, and cryptocurrencies.

Examples of cryptocurrencies commonly traded in Europe include Bitcoin, Ethereum, Solana, Shiba Inu, and Decentraland. The section of the report on cryptocurrencies reveals the network’s concern with the difficulty authorities have in tracking and recovering illegal digital assets, which are not kept in digital wallets, such as Metamask, but are traded through privacy coins, such as Monero, and layer 2 networks, such as Polygon.

Impact

Given the security concerns raised by the report, as well as the importance of this research network, it is likely that government agencies will be pressured to develop legal frameworks that facilitate authorities’ reach over financial transactions related to cryptocurrencies. European investors interested in finding a secure platform to trade cryptocurrencies can rely on the services of eToro, which offers a wide range of assets.

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