Some of the principal arguments for the governments of many nations hoping to establish strong regulations for the crypto money industry, and also for the fact that their use has been prohibited in a lot of these, is their alleged association with the perpetration of criminal acts and the financing of terrorism.
The basic nature of cryptocurrencies, the pseudoanonymity and solitude offered by many crypto monies, coupled with the possibility of using them, independently of government controls, are factors that seem — in the opinion of many authorities — like the ideal elements for them to become chess pieces for organized crime.
However, the data from several studies and investigations that were carried out in various countries show the reverse: crypto coins are not as widely used for criminal actions as many believe. Nevertheless, many news media tend to stress that this notion.
The goal was to bypass the blockade and restrictions implemented by Israel and other countries through their intelligence agencies.
Donations were detected in crypto coins which were received in Binance and Coinbase wallets. At the news degree, it was evident that militants were receiving crypto coins at centralized exchanges, which employ protocols such as Know Your Customer (KYC), Anti-Money Laundering (AML) and Terrorist Financing Prevention (CFT).
On the other hand, the scenario was detected from the Israeli agency Whitestream, which issued a notification to the exchanges to limit funds. In the initial direction, 43 transactions were recorded, with proceeds of 1,550 U.S. dollars; while in the next, 26 trades were recorded amounting to 1,200 U.S. bucks.
Faced with the blockade in the exchanges, the members of this group supposedly opted to migrate the funds to a private wallet. However, other security options stay, taking into account that since last year, the U.S. Department of the Treasury could add crypto currency portfolios into its list of Specially Designated National Sanctions (SDN). In fact, at November 2018 it included two addresses of Iranian bitcoins on the SDN list.
In recent other information regarding terrorist groups linked to crypto currencies also circulated in the media. In November, a New York woman, identified as Zoobia Shahnaz, pleaded guilty to laundering money with crypto coins to fund the Islamic State (terrorist group also known as ISIS).
According to the U.S. Department of Justice, Shahnaz provided Isis using a total of $150,000 by representatives in Pakistan, China and Turkey. Another $22.5 million was acquired through fraudulent bank loans from American Express, Chase, Discover and TD Bank. Although the woman tried to flee to Syria following these trades, she had been captured and is presently facing charges in prison.
Alarming reports in 2018 comprised the dark web identification of a stage for crypto-currency financing of Syrian mujahedin paramilitary activities.
The platform, known as SadaqaCoins, premiered in late August 2018, is available through the Tor browser also features several projects supported by the terrorist group that accept contributions of bitcoin, ether and monero (with the possibility of accepting other cryptocurrencies afterwards ). Additionally, it enables collaborators to browse the platform and choose the project they would like to support.
The discovery made by an open source analyst, Benjamin Strick, created any controversy, as another researcher, named Chris Monteiro, explained the website as a form of cryptocurrencies fraud and questioned the credibility of the pages allegedly related to Jihad.
Despite the fact that the information is creating a picture that builds a direct and close relationship between crypto monies and terrorist groups, there are studies that question this idea for a while.
He explained that following documenting fund-raising campaigns in crypto currencies performed by the Islamic State and Al-Qaeda, the evidence indicates that these groups haven’t had the success expected in this kind of campaigns.
Among the reasons for his assertion, the official highlighted the states of the surroundings where terrorists tend to live, with limited connectivity along with an almost non-existent technological structure. However, he also does not deny that the terrorists’ interest in crypto monies is increasing, although”it hasn’t been profitable”.
He therefore considers that cash is still much more functional for terrorist purposes than crypto currencies.
The identical conclusion was also reached by the European Parliament and academics at New York University School of Law during study conducted in 2017 and 2018. The academics published their study in 2017, and within their research they record terrorists’ problems in using advanced technology, working in areas with limited accessibility to telecommunications.
For its part, the European Parliament study conducted in May 2018, revealed that there is just a few of public records and confirmed cases of financing of terrorism between crypto currencies.
In accordance with parliamentarians, the documents indicate that — albeit in low quantity and non-systematically — both religious and political extremists have used crypto monies for criminal purposes, with little danger of expansion of this sort of action in the brief term.
Some of the kinds of use of virtual currencies for criminal actions which have been registered comprise the group of funds from social networks and decentralized platforms, the transfer of values and funds between terrorist networks using p2p exchanges, along with the sale of goods on the Dark Internet.
Interest In Bitcoin
Despite its findings, the European Parliament does not rule out that terrorist groups’ interest in crypto coins might increase. They foresee, therefore, a long-term advance, due to the development of private crypto monies (because of their anonymity) and a more massive adoption of inventions linked to social networks and online platforms; all this using a potential convergence of terrorism together with cybercrime.
On this particular subject, Yaya J. Fanusie speaks in a recent tweet about the rise of the terrorist learning curve on the technology of crypto coins, taking into account the profits achieved by Hamas after the call it made in early February, which contained a movie and infographics to explain to the public how to purchase bitcoins.