Tackle the looming issue of terrorism financing using cryptocurrencies
Financing terrorism has taken a new turn. The new form of money, cryptocurrency, is being used by numerous terrorist organizations as a safe way to transact money and fund their illegal activities. Cryptocurrencies are known for their anonymity and privacy features. Terrorists target these features to utilize cryptocurrencies as an alternate form of funding.
The connection of cryptocurrencies to terrorism cannot be ignored according to Steven Stalinsky, the executive director of the Middle East Media Research Institute. “With the Islamic State’s physical caliphate in shambles, revenue from oil and taxes have disappeared, but cryptocurrencies such as bitcoin, Dash, Ethereum, Monero, Verge and Zcash, with others in development, constitute an alternative funding source for the terrorists,” wrote Stalinsky.
The transactions are almost instant and anonymous which helps to avoid detection of the transactions executed by the terrorist organizations. Stalinsky said that along with established terrorist outfits, emerging terror groups like Al-Sadaqah, Malhama Tactical and the Ibn Taymiyyah Media Center, have all begun to use cryptocurrencies.
Telegram, the messaging app developed by the Russian entrepreneur Pavel Durov, has acquired $1.8 billion in funding to start its own digital currency. Expressing concerns, the Chairman of the U.S. subcommittee for terrorism, nonproliferation and trade wrote to Durov that a Telegram cryptocurrency “will make it even easier for terrorists to fundraise without disruption.”
“Cryptocurrency has come to terrorism, with an array of terrorist organizations exploiting the anonymity afforded by blockchain technology for fundraising and finances, yet U.S. counterterrorism officials appear to have been slow to grasp the extent the problem,” said Stalinsky.
Some members of the House of representatives of the U.S, in September, introduced a bill to create an “Independent Financial Technology Task Force, [to develop] programs to combat terrorism and illicit use of digital currencies. The bill, which awaits Senate approval, stated that ISIS and Al-Qaeda have begun to use cryptocurrencies and advised all governments to create a framework to control their use.
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