Chainalysis has released their conclusions from a study, that has helped the firm establish that extremist groups are coming up with new ways to help finance their actions. Many of these new ways involve the use of different cryptocurrencies.
Quicker and Far-Reaching Financing
On Friday 17th January 2020, Chainalysis, the blockchain analysts were able to identify AQB (also known as Izz ad-Din al-Qassam Brigades) which is a well known terrorist organization and Hamas military arm as one of the foremost established cases of extremists using digital assets to finance their operations.
According to the analysts, AQB was using a website to come up with new BTC addresses for all donors wishing to send them funds. Included on the website was a detailed how-to-video providing a step by step explanation on how to donate money to their cause and retain their anonymity.
Equated to earlier such efforts, AQB was this time around not only able to raise more funds and increase their donor numbers, but they also managed to do so in a much shorter duration period. This unfortunately isn't first time that crypto has been linked to criminal acts, including hate crimes, and Ponzi schemes.
In similar past studies, Chainalysis research has managed to track up to $2.8 billion worth of BTC linked to criminal organizations and criminal enterprises being held by various exchanges. Close to fifty percent of this haul–$1.4 Billion in BTC—was transferred by leading exchanges Huobi and Binance.
Response from Law Enforcement Organizations
Cryptocurrency funded criminal acts have managed to grab the attention of government organizations and other officials who have insisted that digital assets require additional oversight.
In 2019, Steve Mnuchin, the Treasury Secretary spoke at a FATF gathering (Financial Action Task Force) and commended the global regulatory standards that were being put in place to assist in fighting crypto-relating delinquencies. Steve noted that:
“The FATF will make sure that virtual asset service providers do not operate in the dark shadows […] This will enable the emerging FinTech sector to stay one step ahead of rogue regimes and sympathizers of illicit causes…”
FATF comprises of a congregation of more than two hundred countries and which have demanded that cryptocurrency exchanges put in place measures that will make it easier to identify client transactions and identities.