The European Union has issued a cautionary report targeting cryptocurrency mixers like Bitcoin Lightning Network and Tornado Cash, as well as privacy-focused cryptocurrencies such as Monero, Zcash, Grin, and Dash.
According to a recent report from the EU Homeland Security Innovation Center, second-layer solutions like the Bitcoin Lightning Network could potentially be exploited for criminal activities. The report also compared Mimblewimble, a cryptographic protocol used by cryptocurrencies like Grin, Beam, and Litecoin, with other encryption technologies, highlighting the potential for misuse by criminals to conceal data.
In addition to Bitcoin Lightning Network, the report singled out cryptocurrency mixers such as Tornado Cash and privacy-focused cryptocurrencies like Monero, Zcash, Grin, and Dash as being at risk for misuse in criminal activities. The EU expressed concerns that technologies like Mimblewimble create challenges for law enforcement in tracking cryptocurrency transactions.
While the report underscored the importance of regulatory measures to mitigate risks associated with privacy-oriented cryptocurrency technologies, it also acknowledged that such regulations could serve as a deterrent for criminals.
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