Yaya J. Fanusie, an ex-CIA agent, spoke about how terrorists are diversifying their financing with the help cryptocurrencies during a recent event.
Fanusie said that cryptocurrencies might become the normal way of transacting in the near future but with this advent, it might also become an “illicit financing toolkit” for the terrorist.
“CSIF has documented multiple jihadist cryptocurrency fundraising campaigns on social media cryptocurrencies…but the good news is that most terrorists particularly those operating on jihadist battlefields inhabit environments that are not currently conducive to cryptocurrency use.”
The ex-CIA analyst highlighted an incident where a jihadist funding campaign called Al-Sadaqa [for the charitable living] was claimed to be raising Bitcoin as funds for fighters in Syria. He said that this group was using social media channels to raise awareness among its users to donate anonymously using Bitcoin. He added:
“The group encouraged followers to purchase Bitcoin vouchers from website that took payment in Euros, the group hosted sites where supporters could use Bitcoin ATMs to buy cryptocurrencies so clearly the campaign organizers were trying to make the Bitcoin process easier for novices.”
Furthermore, Fanusie said that the group diversified from Bitcoin to other cryptocurrencies. According to Fanusie:
“The group’s most significant adaptation was eventually branching out beyond Bitcoin by early 2018, the group posted on Telegram that they were accepting cryptocurrencies like Monero, Verge and Dash.”
This is significant because tokens like Monero are privacy coins and the transactions are almost untraceable. These cryptocurrencies provide the users with features to hide their transactions from the general public, unlike Bitcoin, whose transactions are open and viewable by the general public.
“The above case clarifies that some terrorist organizations are looking to add cryptocurrency donations to their funding streams…this means that if public cryptocurrency adoption increases, terrorist groups will probably begin to transact more in digital tokens.”
The Director of Analysis for the Foundation for the Defense of Democracies’ Center on Sanctions and Illicit Finance, said that people usually purchase or transact cryptocurrencies using exchanges, so he urged financial authorities to engage with exchanges to keep bad actors and terrorists from such platforms.
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