Europol Warns Crypto Industry Need to “Begin Preparing Now” for Quantum Threats

Europol is urging the crypto industry to begin preparing for quantum computing threats, warning that crypto wallets are the primary point of exposure to quantum attacks.

The EU law enforcement agency recommends a phased transition to quantum-resistant cryptography, while noting the timing of the threat remains uncertain.

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Europol Warns Crypto Wallets Are Primary Risk for Quantum Attacks

On October 7, Europol said the crypto industry, policymakers, and organizations that hold sensitive data are required to begin preparing now for quantum computing threats. While the timing of that capability remains uncertain, quantum-resistant efforts must begin as adapting systems and coordinating upgrades will take time.

The EU law enforcement agency said they are publishing two reports highlighting the need to identify and prioritize threatened assets. It also requires a plan to transition to post-quantum cryptography.

It must focus on algorithms designed to withstand attacks from both conventional and quantum computers while ensuring interoperability and coexistence with existing crypto systems.

Europol said “crypto-agility” should be pursued proactively rather than delayed until a clear threat date appears. The first report, Quantum Computing and Cryptocurrencies, was by Europol’s European Cybercrime Centre.

The report identified cryptographic keys used to control wallets and authorize transactions as the primary point of exposure. A powerful quantum computer could derive a private key from an exposed public key and move funds without the owner’s permission.

Notably, hash functions that support blockchain integrity are comparatively quantum-resistant. This is central to where defenses should be focused. The agency is calling on the crypto industry for a phased move to quantum-resistant cryptography, with the first focus on stronger wallet security and better key management.

“Blockchain developers, wallet providers, policymakers and users all have a role to play. Coordinating upgrades across decentralised networks will be a particular challenge, making early preparation essential,” the report stated.

To mitigate these key-exposure vulnerabilities, developers and Web3 enterprises can adopt robust MPC wallet infrastructure for businesses to secure programmatic key generation.

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Concerns Over Encrypted Data Collection Attackers Today

The second report, “Harvest Now, Decrypt Later” by Europol and the University of Carlos III of Madrid, revealed how attackers collect encrypted data now to decrypt it once more advanced computing is available.

The approach is keeping records confidential for many years, including government communications, intellectual property, medical records and law enforcement files. While Europol says there is currently no clear evidence the technique is used at scale, but risks can’t be ignored.

The storage and processing required make high-value, long-lived secrets the most plausible targets. The crypto industry needs to determine which assets need long-term protection, prioritizing systems most exposed to future quantum attacks.

EU law enforcement agency recommended measures including dropping outdated security protocols, limiting unnecessary data retention, improving flexible key management and testing post-quantum solutions in phases.

For the crypto industry, Europol says preparation means coordinated work on protocols and wallets, with clear details about future upgrades. The EU’s NIS Cooperation Group urges adopting a post-quantum strategy by 2026-end.

Meanwhile, NIST proposed phasing out common public-key configurations by 2030 and classical public-key cryptography by 2035. The crypto industry is already moving ahead, with Ethereum targeting a quantum-resistant Layer-1 by 2029.