Why crypto is useless for financing terrorism

Image for post
Image for post

Let’s get this straight once and for all: crypto is not the ideal ‘currency’ for financing terrorist organisations. According to Yaya Fanusie, a senior member of the Foundation for Defense of Democracies Center on Sanctions and Illicit Finance, terrorist cells prefer cash and some networks that have tried to use cryptocurrency have found it impossible to do so.

Ted Knutson, writing for Forbes, has also highlighted the headaches jihadis have encountered trying to use virtual currencies. There is a good reason for that: many of these organisations are based in places where there just aren’t a lot of crypto ATMs; indeed there probably aren’t many traditional ATMs, hence the need for cash. As Osato Avan-Nomayo writes in bitcoinist.com: “Searching for a means to convert digital coins to fiat money might mean a dangerous trip several miles away into areas where reconnaissance infrastructure might find more success in tracking movements.”

Furthermore, in a response to those who are convinced crypto is behind a massive range of criminal and terrorist activities, Jerry Britto, the CEO of Coin Center revealed that according to the Center for a New American Security (CNAS) that the use of Bitcoin in terrorist activities between 2015 and 2017 amounted to only about eight bitcoin.

The only evidence for the use of crypto in terrorism is anecdotal and currently jihadis of any type are not remotely incentivised to use crypto when they have good access to the mainstream finance institutions.

However, there is one area where terrorists might be using it and that is on their social media and propaganda websites where some are now adding crypto wallets. The crypto collected is not used to finance acts of terror; it is used to market it. Knowing this, it is important that countries take steps to ensure that crypto doesn’t suddenly become more attractive as a funding conduit for terrorist networks, which would only give the crypto haters an excuse to say “I told you so.”

Written by

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store