Germany and Austria Fund Research into Bitcoin Organized Crime

The Austrian and German governments are funding a research effort into the use of digital currencies in organized crime.

Dubbed "BitCrime," the initiative is backed by a number of government agencies from both countries and is divided into two sub-projects.

The German subproject is primarily supported by the German Federal Ministry of Education and Research, with a budget of €1.8 million (about $2 million). Other supporting agencies include the Federal Criminal Police Office, the University of Münster, and several federal agencies dedicated to law enforcement and financial oversight.

The Austrian subproject, with a budget of €635,000 (about $725,000), is mainly supported by the Austrian Federal Ministry of Transport, Innovation and Technology, the Austrian Institute of Technology and the Federal Ministries of Finance and Interior.

A memo outlining the status of the project reads:

“The joint project will assess the subject matter and its threat landscape, developing innovative and viable approaches to regulating virtual currencies, compatible with their fundamental nature. The project will work towards developing actionable, internationally applicable and interoperable solutions for Europe and beyond.”

German researchers, the memo outlines, are developing “technical and organizational approaches” to the problem and are beginning to experiment with new practices to create a testing environment. In Austria, project leaders will explore analytical methods for investigations involving digital currencies, including those focused on the black market.

The project comes as European governments, as well as the European Union, look to expand existing regulations to cover digital currencies and blockchain technology, as well as develop new frameworks for the technology.

Members of the European Parliament discussed some approaches at a recent forum, and the European Commission, the executive arm, is also weighing options.

Project representatives did not immediately respond to requests for comment.