Crypto mining and layer-2 blockchain solutions have drawn criticism from the European law enforcement organization Europol, which claims they provide "additional problems for law enforcement investigations."

The Hague-based organization described in a recent 40-page paper on cryptographic encryption how cryptocurrency mining has grown in popularity as a means of money laundering for criminals.

According to Europol, criminals can utilize mining operations to conceal their illegal gains and, in certain situations, even make more money. Suspicious activity has also been found in mining pools, especially those that are used by ransomware operators.

But Europol sees other threats in the cryptocurrency space besides just crypto mining. Europol expressed apprehensions regarding the wider cryptocurrency terrain, stressing that the growing utilization of layer-2 apps and zero-knowledge proofs on the blockchain may impede the process of tracking down money.

The government issued a warning, saying that these technologies “may cause additional problems for law enforcement investigations,” but it gave no details as to what specific difficulties these scaling technologies would provide.

The paper also stated that the SLIP39 standard, sometimes referred to as Shamir Backup, may make retrieving a criminal's wallet "complicated significantly." Several recovery shares may be created using this standard, which is utilized by hardware crypto wallets, as opposed to only one mnemonic phrase. According to Europol, each recovery share is 20 words long, and a user-specified quantity of these shares is needed to restore a wallet, adding still another level of difficulty for law enforcement.