Despite scattered reports and fears about crypto's potential use in facilitating terror activities, multiple bitcoin fundraising attempts have failed and cash remains substantially more useful to terrorists.
This was the message delivered by Yaya Fanusie, director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance in a prepared testimony delivered to the House Financial Services Committee on Friday, Sept. 7.
'Cold hard cash is still king'
According to Fanusie's testimony, a number of terrorist groups including al-Qaeda and the Islamic State have attempted to raise funds using cryptocurrency several times without achieving any notable success.
Buttressing this point, Fanusie mentioned the example of a terror group known as Mujahideen Shura Council (MSC) in the Environs of Jerusalem, which carried out a crypto fundraising campaign for several weeks in 2016 and ended up netting just a little over $500 in donations.
Fanusie explained that crypto is generally a poor medium of exchange for terrorists because they are often located in areas with poor internet infrastructure, and so they are forced to rely on cash purchases for the goods they need.
He also explained that despite crypto's promise of anonymity, cash still remains the most anonymous means of terror financing. Despite this, he further noted in his testimony that in addition to terrorists, jihadist recruitment and publicity platforms are increasingly integrating bitcoin into their funding appeals.
In his view, the U.S. government's response to this threat should be to ensure rigorous enforcement of KYC and AML regulations for crypto exchanges while at the same time finding a way to deal with the growing threat posed by smaller exchanges offering trades in privacy coins such as monero.
In his words:
"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."
Fanusie's testimony corroborates the contents of a 2016 Europol report which found no confirmed evidence to suggest that bitcoin is used for terror financing.
Failing Terrorists but Enabling Racists?
While terror organisations may not have found much success with cryptocurrencies, it has been reported that several white supremacist groups around the world are experiencing a measure of success with crypto for fundraising and payments.
A Forbes report from January 2018 outlines the successes of white supremacist platforms like the Daily Stormer who have raised millions of dollars in anonymous donations using bitcoin.
CCN also reported in July 2017 that the controversial whites-only town of Orania in South Africa's Northern Cape province is looking into setting up its own digital currency.
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