Germany & Austria's Project BITCRIME

A joint study between Austria and the German Federal Ministry of Education and Research will look at the use of virtual currencies and how supposed illicit transactions and alleged criminals can be prevented, detected, tracked and prosecuted. The program, which has funding totalling €1.5m and will run through to the end of 2016, will also look at the need for supervision and regulation in the cryptocurrency space.

Project partners include:

  • Westfälische Wilhelms-Universität Münster
  • Empolis, Kaisers-
  • University of Marburg
  • AITAustrian Institute of Technology GmbH, Vienna (Austria)
  • Vicesse Vienna Centre for Societal Security, Vienna (Austria)
  • M2D Mastermind Development GmbH, Vienna (Austria)
  • SBA Research gGmbH, Vienna (Austria)
  • Xylem Science and Technology Management GmbH, Vienna (Austria)

Associate partners include:

  • Federal Ministry of Finance and Federal Ministry of the Interior (both Vienna, Austria)
  • Federal Criminal Police Office (BKA), Wiesbaden
  • Federal Financial Supervisory Authority (BaFin), Bonn
  • Federal Bureau of Economics and Export Control (BAFA), Eschborn
  • Bavarian State Criminal Police Office, Munich
  • Federal Association for Information Technology, Telecommunications and New Media (BITKOM), Berlin
  • Commerzbank Bank AG, Frankfurt aM
  • Bitcoin Germany AG, Herford
  • Albert-Ludwigs-University of Freiburg

Bitcoin Germany AG, an associate partner in the study, is a German bitcoin exchange which in 2013 entered into a partnership with Fidor Bank AG.

Although the research project began back in November of 2014, publication of a document outlining the study first appeared on the Federal Ministry of Education and Research's website some time during the past week. Despite that delay, Austrian research centre SBA Research outlined what was at the time still a proposal for the project back in mid 2014. It describes the project as such:

The goal of this project proposal is to research innovative solutions for the identification, prevention and reduction of organized financial crime, such as money laundering, with particular regard for virtual currencies. The project will produce two primary results, based on the most urgent questions posed by the project stakeholders. The first is a series of reports that will provide foundations for the economic classification of virtual currencies to politicians, lawyers, and government agencies. The second is the development of methods and algorithms that (a) aggregate virtual currency transactions in order to identify specific actors, (b) monitor these transactions and identify potentially criminal activities in real time, and (c) correlate these transactions with activities in hidden social networks in order to support the de-anonymization of the actors. Software that demonstrates these methods will be installed, tested and evaluated by project stakeholders.

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