US Congress Committee Shares Why Crypto For Terrorism is “Poor Form of Money”
The official press release from the U.S. Congress Subcommittee on Terrorism and Illicit Finance revealed the latest topic of discussion on terrorism funding – cryptocurrency. The release was issued on September 7th, which discussed the best ways to monitor these threats.
In the hearing, there were multiple methods of funding that the committee discussed. Some of the approaches they found terrorists using included transactions through traditional institutions, the hawala exchange system, and especially cryptocurrency.
So far, most groups have not had much success with the use of cryptocurrency in their work. Al-Qaeda, the Islamic State, and multiple other groups have all tried and failed, thus far.
The director of analysis for Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, Yaya Fanusie, spoke up about the environments that these groups are in. Typically, terrorists that are involved with “jihadist battlefields” are the ones that are not living in areas with the substantial access to cryptocurrency exchanges. In fact, these areas can barely operate crypto, let alone use it to purchase supplies or fund their projects. Most of the time, fiat currency is the preferred money for purchases.
Realistically, fiat money is the best and most anonymous way to accrue funding, which Fanusie says has made it most popular for terrorists. He believes that cryptocurrency is a “poor form of money for jihadists,” but countered that “cold hard cash is still king.” However, there are still plenty of cases where terrorist organizations have chosen to use cryptocurrency in their campaigns.
Fanusie suggests that the only way for the government to put a stop in these uses of cryptocurrency, they need to become more informed about analyzing those types of transactions. He said, “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.”
He also recommended that there is more attention to minor cryptocurrency exchanges, which are also referred to as “privacy coins.” His reasoning is due to the face that they have worked to improve their anti-money laundering (AML) and know-your-customer (KYC) policies recently.
One group that decided to work on security solutions on their own this year has been LexisNexis, who decided to collaborate with Blockbid. Together, they have been implementing these changes for exchanges that are called “Trade with Confidence.” The goal is to stop the financing of terrorism and other criminal activities.
Rep. Red Budd at the House Financial Services Committee brought up a bill that would help to fight terrorism in January 2018. The bill offers incentives to anyone that could have information about terrorist situations that involve cryptocurrency, which eventually leads to the convictions of the parties involved.