Last week, the U.S. Department of Justice seized nearly two million dollars worth of cryptocurrency assets from three U.S.-designated Foreign Terrorist Organizations—al-Qaeda, ISIS, and Hamas. The operation, which represents the largest seizure of terrorist groups’ cryptocurrency accounts, comes as federal law enforcement agencies are increasingly pursuing new pathways to stem the flow of terrorist financing and money laundering. The seized assets also included numerous websites and Facebook pages, along with 300 cryptocurrency accounts affiliated with the terror organizations.
In April, the Counter Extremism Project (CEP) and Berlin Risk published the joint study, Cryptocurrencies as Threats to Public Security and Counter Terrorism: Risk Analysis and Regulatory Challenges, which highlighted the dangers and risks associated with terrorist groups utilizing cryptocurrency to finance extremist activities.
Recent evidence demonstrates that terrorist groups and their supporters have become increasingly familiar with new technologies, such as cryptocurrency. It is evident through the latest seizure that the technical capabilities and capacities of terrorist groups are progressing rapidly.
Terrorists and their sympathizers are interested in fundraising in order to receive donations to support their respective organizations. Funds raised can then be used to purchase material to support terrorist attacks and to provide other financial support for attacks. Operational support also includes the use of funds to support terrorist groups on an ongoing basis, including personnel costs, and funds for general security and communication. Experience has shown that the amounts of money in the area of terrorist financing are typically very small and can easily be disregarded by regulators.
To read CEP’s joint study with Berlin Risk, Cryptocurrencies as Threats to Public Security and Counter Terrorism: Risk Analysis and Regulatory Challenges, please click here.