Modern terrorist attacks display increasingly sophisticated ICT skills in both conducting their attacks and communicating them globally through digital technologies, combined with, in some cases, an awareness of counter-intelligence measures, largely enabled by Web 2.0. The Paris attackers displayed the most sophisticated use of these, including so-called Dark Web platforms like Tor (a free and open-source software for enabling anonymous communication, launched in 2006) and Telegram (an encrypted instant messaging, file-sharing and voiceover service, launched in 2013), while some of the weapons used in the attacks are believed to have been bought from criminals using bitcoin on the Dark Web.
Terror financing and money laundering have blossomed in the last one year as countries and governments across the world directed their focus only on battling the Covid 19 pandemic. Though terror financing and money laundering are different activities, both are interlinked as they unlawfully leverage the weaknesses and lacunae of the financial system to carry out criminal activities.
The new age digital asset in the form of crypto-currency has also boosted terror financing. Bitcoin and other cryptocurrencies offer terrorists the benefit of anonymity, which they exploit to fundraise, and transfer and purchase weapons, illegally in a crowdsourced approach to terrorist financing. “Why should the value of bitcoins surge? One of the reasons could be the extensive use of this asset form for illegal and criminal activities. The cryptocurrency space must be watched out for. At present it is not regulated and this provides an opportunity to terror groups,” BK Singh, Retired Joint Commissioner Crime, Delhi Police said.
An array of terrorist organizations have been reported to have exploited the anonymity afforded by blockchain technology for fundraising and finances. The Islamic State appears to have been defeated as claimed by Trump with it’s revenue from oil and taxes have disappeared, but cryptocurrencies such as bitcoin, Dash, Ethereum, Monero, Verge and Zcash constitute an alternative funding source for the terrorists. Transactions are swift and anonymous, and disrupting them is difficult. On Nov. 26 2018 in a federal court in New York, 27-year-old Zoobia Shahnaz pleaded guilty to financially supporting the Islamic State terrorist group with a scheme that employed money laundering and bank fraud, along with bitcoin and other cryptocurrencies, according to prosecutors, The Washington Post, reported.
In addition to more established terrorist organizations, an emerging cadre of terrorist groups and their affiliates, such as Al-Sadaqah, Malhama Tactical and the Ibn Taymiyyah Media Center, have begun using cryptocurrency, The Washington Post, reported. Communications about transactions often take place on encrypted messaging apps, such as Telegram, favored by terrorist groups because they are easy to use and offer a secure venue for planning and recruiting — and for advising Western supporters about how to use cryptocurrency.
Meanwhile, the global money laundering and terrorist financing watchdog Financial Action Task Force (FATF) retained Pakistan in its ‘grey list’ for failing to weed out terror financing and money laundering. FATF noted that while Pakistan completed all but 1 of 27 items, but in its Counter Terror Financing (CTF) and Anti Money Laundering (AML) effort, it has failed to adequately investigate and prosecute senior leaders and commanders of UNdesignated terrorist groups. “The FATF has retained Pakistan in the grey list and this is a clear indication
that even closer home terror financing has continued.
U.S. officials are worried about an increase in cryptocurrency use by terrorist organizations as the technology becomes easier to handle. Groups are in a “nascent stage” with digital money but are increasingly using it for fundraising, said Stephanie Dobitsch, deputy undersecretary in the Department of Homeland Security’s Office of Intelligence and Analysis.
“The concern for us is that as the technology advances and becomes more user-friendly, that we’re going to see more activity,” she told lawmakers in July 2021 during a hearing before the House Homeland Security Intelligence & Counterterrorism Subcommittee. Cryptocurrency can be difficult to track, making it a popular tool for money laundering and other illicit activity. It’s becoming mainstream among transnational criminal organizations, Dobitsch said, and is used in ransomware attacks by nation-states and cybercriminals.
The U.S. announced in August 2020 that it had seized more than 300 cryptocurrency accounts from terrorist groups, including al-Qaida. Those groups solicit donations via cryptocurrency, Dobitsch said. A growing familiarity with cryptocurrency may open the door to cyberattacks by terrorist organizations, Dobitsch said, adding that the groups have displayed a “rapid ability to adapt” and may turn to ransomware to fund their operations.
Subcommittee Chair Elissa Slotkin (D-Mich.) and other lawmakers pushed Dobitsch and officials from the Secret Service and Homeland Security Investigations on whether they needed expanded legal authorities to track cryptocurrency and combat related cybercrime effectively. The Secret Service needs more investigative authorities, more law enforcement officers, and more computer scientists to “keep pace with the adversary,” said Jeremy Sheridan, assistant director of the Secret Service’s Office of Investigations.
References and Resources also include: