The Dark Side of Bitcoin: How ISIS, Jihadists Are Ramping Up Cryptocurrency Investments
Terrorist groups, like ISIS, are using untraceable cryptocurrencies and now hold “a prominent presence online,” according to The Jerusalem Post.
These groups are encouraging Bitcoin donations for fund-raising efforts.
“There is currently no shelter to protect the food and ammunition from the rain,” the group, called al Sadaqah (“charity” in Arabic), lamented in a post on the messaging app Telegram. The group’s Twitter feed contains a video showing a dirt floor strewn with blankets, bags of pita bread and hand grenades along with a message—“Donate anonymously with Cryptocurrency”—followed by a bitcoin address. So far, according to an online ledger, the group has received about $1,000,” writes the Wall Street Journal.
These untraceable currencies have quickly become global terror networks’ preferred method to move and collect funding, according to Yaya J. Fanusie, the director of analysis at the U.S. thinktank the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance.
“It is fast, efficient, and does not pass through the same interest-loaded and traceable routes that any usual payment methods would go through,” said Hassan Abdo, an al Sadaqah spokesman to the WSJ. “This way we and our donors can keep our full anonymity.”
Although these currencies are much more difficult to track, security agencies are still able to find a trail of terror-funding activity through numbers instead of names.
But these terrorist groups aren’t afraid to use complicated approaches to hide funds that are always evolving.
“Another separate jihadist media outlet ran a bitcoin funding campaign using a website with a link which opened up to a page on the site that generated bitcoin addresses,” writes Express UK. “This new method worked for the terrorists and kept them from the visible ledger by pointing to an external bitcoin payment site, these links open to a page within the website that generates bitcoin addresses. Supporters could copy these addresses and donate to them directly, away from the page.”
“This shows some technical sophistication on the part of that site’s administrators because they apparently have eliminated their dependence on digital currency exchange services,” writes Fanusie.
Donations to ISIS are being received via Bitcoin all over the world.
In December, the Department of Justice (DOJ) announced that the 27-year-old U.S. citizen Zoobia Shahnaz was arrested and charged for sending ISIS funds through Bitcoin.
She was charged with “bank fraud, conspiracy to commit money laundering and three substantive counts of money laundering” and allegedly sent $85,000 to Jihadists.
Her “transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS,” according to the DOJ.
This isn’t just about getting funds from supporters either. It’s about building recruits.
“What they’re more than likely attempting to do isn’t just to pick up a few peanuts in donations here,” said Michael Smith, a fellow at the New America think-tank who studies terrorists’ use of technology. “It’s to build a network of sympathizers.”
Author’s note: It’s no surprise that untraceable currency is attractive to terrorist groups. But, investors in cryptocurrencies like that there isn’t a lot of regulation. This makes it risky, but big risks can bring big rewards. So should Bitcoin be tracked in a more controlled environment? Or do you allow a freewheeling currency and enjoy the benefits of new economic gains that is less under control?