ISIS and Hamas Use Cryptocurrency for Laundering

ISIS and Hamas Use Cryptocurrency for Laundering

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A think tank urges EU governments to collaborate on a regulatory framework for tighter regulations on money laundering by terrorist organizations. ISIS is using cryptocurrency platforms to conceal donations and get around financial security measures, experts have revealed after a surge in advertising for donations.

They fear the terrorist group’s missing $300 million (Dh1.1 billion) war chest could have been transferred into a digital currency to hide it from the authorities.

Last year ISIS used cryptocurrency to fund the Easter Sunday terrorist attack in Sri Lanka, which killed more than 250 people when suicide bombers attacked churches and hotels in quick succession.

The Counter Extremism Project, a think tank, tracked the trend in a new report, Cryptocurrencies and Financing of Terrorism: Threat Assessment and Regulatory Challenges. Its director, Hans-Jakob Schindler, told the authorities have searched for the group’s missing war chest since 2017. “This would be an ideal storage mechanism until it is needed. If done right, it would be unfindable and unseizable for most governments.”

Dr. Schindler said there had been “consistent cases” of ISIS and Hamas using cryptocurrency since 2014. “From the get go, ISIS has been clearly interested in what can be done with this new technology,” he said. When digital transactions were broken up into smaller transactions it was “next to impossible” for them to be traced back.

“Cryptocurrency is good for terrorists if they become public because it enables more people to fund them without running the risk of being discovered or stopped,” he said.

The publication of ISIS’s digital currency handbook in 2014 was an “important milestone,” says Yaya Fanusie, of the Foundation for the Defence of Democracies think tank. “It has grown in sophistication. Instead of one blockchain address there are multiple addresses that are difficult for law enforcers to track.

“We are talking software you can download and you do not have to go through an exchange.” “We are going to have to be ahead of the game,” Mr Fanusie said.