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Terrorists Still Prefer Cash over Cryptos

terrorism

One of the biggest criticisms thrown towards the crypto market is its possible use in illegal activities namely money laundering and terrorist activities. And for this reason, stricter rules have been implemented in the market. Some countries made it harder for blockchain, ICOs, and crypto-related businesses to operate.

For instance, cryptocurrency exchanges now get the information of their customers. You also have countries such as Japan that have banned the use of altcoins that promote anonymity such as Monero and Dash.

But do criminals really prefer cryptocurrencies in their transactions? If you will ask Yaya Fanusie who is a senior member of the Foundation of Defense of Democracies Center on Sanctions and Illicit Finance, terrorist organizations still prefer to transact using cash over cryptocurrencies. According to Fanusie, terrorist networks find it difficult to use cryptocurrencies in funding their activities.

Operational Headaches

There are a number of hurdles that terrorist groups need to deal with if they want to make use of cryptocurrencies in their operations. For instance, may jihadists don’t really operate in technologically advanced locations. It means that finding ways to convert digital coins into fiat money would mean a trip to several miles away from their camp dealing with security threats.

Just how prevalent is the use of Bitcoin in terrorist activities? If you are going to rely on the information provided by Center for a New American Security (CNAS), the amount of Bitcoin utilized for terrorist activities between 2015 to 2018 amounted to only around eight bitcoins. In addition to this, the study mentioned that jihadists enjoyed mainstream financing which means that there is no reason to replace fiat.

KYC and Anti-Money Laundering Laws

Both Know-Your-Customer (KYC) and anti-money laundering (AML) regulations applied in different countries made it difficult for terrorists to utilize the cryptocurrencies, not to mention the growing sophistication in tracking down crypto transactions.

However, this doesn’t mean that terrorists don’t have any virtual currency. According to Fanusie, there are websites that contain radical propaganda that have been integrated with crypto wallets. Though terrorists can’t use cryptos directly to sponsor acts of terrorism, it can still be used in order to spread their propaganda.

Cash is King

According to Yaya who was speaking before Congress, he mentioned that “Cold hard cash is still king”. He also added that “Crypto is a poor form of money for jihadists because they usually need to purchase goods with cash often in aras with unreliable technology infrastructure”.

But of course, it is important to for governments to exercise prevention in order to prevent the possibility of terrorist crypto fundraising. Fanusie mentioned that “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”.

Considering the regulatory changes happening in different parts of the world, not to mention the volatility that cryptocurrencies deal with, it is possible that criminals still stay away from cryptocurrencies as much as possible. In fact, even the US DEA believe that the criminal activities surrounding cryptos dropped by 80% since 2013.

 

Janneke Eriksen

Janneke is a writing ninja and has vast experience in journalism, specifically in the crypto space. As a blockchain believer and avid Bitcoin fan, she’s incredibly excited to share to our readers the latest news around so they are always updated wherever they are.

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