Terrorists Stay Clear Of Cryptocurrencies But For How Long?

Contrary to perception, cryptocurrencies might as well not be a force for evil. For the longest time, regulators around the world have raised concerns that digital currencies pose a significant danger in facilitating money laundering activities as well as financing terrorist operations.

However, a Senate hearing in the U.S has provided the clearest indication that the same might not be the case. A prepared testimony by Yaya Fanusie, a director for analysis for the Foundation for Defense of Democracies, presented to the Senate paints a clear picture as to why terrorist are struggling to make good use of cryptocurrencies.

According to Mr. Fanusie, a good number of terrorist especially those involved in jihadi activities operate in environments that are not conducive to cryptocurrency use.

“They usually need to purchase goods with cash (which is the most anonymous funding method), often in areas with unreliable technology infrastructure. In addition, cryptocurrencies are based on distributed ledger (blockchain) technology, where users’ pseudonymous transactions are recorded for public viewing. This leaves a trail that unsophisticated users may find difficult to obfuscate,” said Mr. Fanusie.

While the terrorists appear to be struggling to leverage the power of cryptocurrencies, Mr. Fanusie believes that this is not something to be proud of as the technology continues to evolve. Widespread adoption and usage of cryptocurrencies going forward should see a good number of the barriers drop something that the director believes could work to the terrorist advantage.

Cryptocurrencies for Terrorist Activities

For the longest time, there has been growing concerns that the distributed nature of cryptocurrencies which makes it hard track transactions, was working to the advantage of terrorist. Numerous reports have come out claiming that suspicious characters were using the so-called privacy-focused Altcoins to send money that is in return used to finance terrorist operations.

However, it appears cold hard cash remains the driving fuel behind most terrorist activities even as regulators remain skeptical about cryptocurrencies use cases.

Looking forward, it may only be a matter of time before terrorist groups find their way to cryptocurrencies and start leveraging the power of blockchain technology.

Those illicit actors have always moved with speed over time to adopt new technologies if they believe they have the potential to enhance their operations. For example, when paper checks, credit cards as well as PayPal came into being, criminals exploited them to their own advantage.

Even though they are yet to get a good foothold of cryptocurrencies, it does not mean that regulators have to take a back seat and watch. Now is the time for law enforcement agencies as well as intelligence agencies to gain a head start before the terrorists start exploiting digital tokens because of widespread adoption.

The fact that cryptocurrencies could soon become the way for transaction all but calls for increased scrutiny by authorities to ensure they don’t end up fuelling terrorist activities. The FDD has already documented a number of fundraising campaigns run on social media entities associated with terrorist organizations such as Al-Qaida and the Islamic state. While the groups have had limited success, as time goes on the same could change.