Many are concerned regarding the possibility that Bitcoin and cryptocurrencies are being used for illegal activities. And because of this, regulatory action has been made by different regulators all over the world. Though there were reports saying that terrorist organizations such as ISIS still prefer cash, it doesn’t remove the fact that Bitcoin and other altcoins can be used for illegal activities.
Wiring Terrorists More Than $150K
On Monday, a New York woman pleaded guilty for supporting Islamic terrorist group ISIS. She was charged of using Bitcoin and other altcoins in money laundering. Zoobia Shahnaz who is a 27-year old resident of Brentwood, Long Island wired more than $150,000 to ISIS fronts in Pakistan, China, and Turkey last year. In the same year, she was intercepted for trying to leave the US and going to Syria where ISIS activity was rampant.
She is facing up to 2 decades of prison time. Before being acquainted with ISIS, she was working as a lab technician in Manhattan earning around $71,000 annually. She traveled to Jordan in 2016 as a volunteer for Syrian American Medical Society. Many believed that this is where she decided to support the terrorists. According to prosecutors, “For two weeks, she assisted in providing medical aid to Syrian refugees in Amman (Jordan) and in the Zataari Refugee camp, where ISIS exercises significant influence”.
However, it was also discovered that months before the trip to Amman, she was discovered to be conducting “extensive internet research” on traveling to Syria and even “joining the ISIS”.
Scamming Banks
Her illegal activities started in March 2017 when she was engaged to scam Chase Bank, TD Bank, American Express, and Discover. She fraudulently obtained six credit cards. Those cards were used in order to buy more than $62K worth of Bitcoin and other cryptocurrencies. According to the prosecutor, “most of these cryptocurrencies that (Shahnaz) purchased were then converted to US dollars and transferred into a checking account in the defendant’s name”.
Also, she was able to apply for a $22K fraudulent loan from a Manhattan bank. After obtaining the money, there were recorded wire transactions abroad. This way, she will be able to conceal the source and the destination of the illegally obtained funds. She then prepared to travel to Syria after obtaining a Pakistani passport. She quit her job while her family doesn’t know any of it.
By July, she went to JFK Airport in New York when her family thought that she was headed for work. She was already planning to go to Pakistan with a final destination to Istanbul. Istanbul has been a common jumping point for individuals from the West looking to join ISIS. When she was caught by law enforcement agents, she was questioned who she was wiring the cash only to provide conflicting answers. Shahnaz months later was detained without bail.
Most regulatory changes today happened because of fear of money laundering and even the use of Bitcoin and cryptos for terrorist activities. There are even some cryptocurrencies that provide an extra layer of anonymity that have been banned by some crypto exchanges.
