Yaya Fanusie, director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance recently gold the House Financial Services Committee that terrorist organizations have tried and failed to raise funds with cryptocurrencies.
Fanusie’s words came through a prepared testimony, according to Forbes, that revealed al-Qaeda, the Islamic State, and other terrorist groups tried “multiple times to raise funds via cryptocurrency,” but in the end “cold hard cash is still king.”
Per the defense specialist, cryptocurrencies are a poor form of money for jihadists as they have to purchase goods with cash, in areas with unreliable technological infrastructure. As an example of their lack of success with crypto, Fanusie revealed a group called Mujahideen Shura Council (MSC) only got two contributions totaling $500 in 2016 through an online campaign.
The defense expert notably claimed US government agencies that investigate terrorist funding should work on analyzing cryptocurrency transactions to counter potential terrorist crypto fundraising campaigns. He added a challenge authorities may face are privacy-centric cryptocurrencies like monero (XMR).
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.
Notably, as CryptoGlobe covered, regulators have been forcing crypto exchanges to keep privacy coins under control. Prague-based Changelly has revealed it may withhold users’ XMR if necessary, while Japan’s Financial regulator pressured crypto exchanges into dropping privacy coins.
Per the exeprt cash is reportedly still king as “it is the most anonymous method for funding” since there’s no public blockchain where every transaction can be tracked. Jihadist media, Fanusie claims, has also launched bitcoin fundraising campaigns.
White Supremacists and Crypto
Forbes’ report, citing an official of the Anti-Defamation League, notes that while terrorist organizations haven’t been able to raise funds through crypto, bitcoin has become the preferred payment method for the largest white supremacist website out there, Stormfront.
Notably, some bitcoin payment processors aren’t willing to service such groups. To still receive their donations, the Daily Stormer website reportedly receives BTC through the mail, the same way it would receive cash or checks.