Crypto is a ‘Poor Form of Money’ for Funding Terrorism, Congress Concludes

Despite cryptocurrency, mainly Bitcoin and Ethereum, being not necessarily a good way to receive money to fund terrorism, the U.S. Congress Subcommittee on Terrorism and Illicit Finance has discussed various methods of terrorism financing with cryptocurrency.

In order to monitor threats and methods of terrorist financing, the hearing looked at major means of transferring funds by terrorists, including traditional financial institutions and semi-formal methods, as well as cryptocurrencies.

However, while al-Qaeda, the Islamic State, and other terrorist groups have all attempted to raise funds through crypto, they have not had great success, as Congress concluded in the meeting, some only raising up to USD$500.

Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, said that most terrorists, notably those that fight on “jihadist battlefields,” are currently living in environments where crypto is not necessarily reliable, meaning that fiat use is preferable for buying goods.

Fanusie claimed fiat money as the “most anonymous” method for funding, claiming that it is very popular among terrorists.

The expert further claimed that in order to combat the potential successful use of crypto fundraising campaigns by terrorists, the U.S. government bodies that are responsible for terrorist finance investigation should become more skilled in analyzing cryptocurrency transactions. Fanusie noted,

By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.

At this point, Fanusie appeared to recommend that the authorities should focus on minor crypto exchanges that trade alternative tokens or “privacy coins” instead of major exchanges that have significantly boosted their anti-money laundering (AML) and know-your-customer (KYC) policies over the past few years.

In January 2018, Rep. Ted Budd (R-NC) of the House Financial Services Committee introduced a bill that aims to fight terrorism by offering rewards for information that leads to convictions of cryptocurrency-supported terrorism.

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Photo by Joakim Honkasalo on Unsplash

Sources

CoinTelegraph


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