Posted in: Archive
August 13, 2014 5:00 AM UTC

Will Bitcoin Be Used To Fund Terrorism?

One of the charges that has been levied against Bitcoin is that it is involved in the funding of terrorism. In the current media, such a charge is highly damaging, but is it entirely without foundation? In an article titled "‘Bitcoin and the Charity of…

One of the charges that has been levied against Bitcoin is that it is involved in the funding of terrorism. In the current media, such a charge is highly damaging, but is it entirely without foundation? In an article titled “‘Bitcoin and the Charity of Violent Physical Struggle,’ supporters of the Islamic State of Iraq and Syria (ISIS) called for terrorism-supporters around the world to fund a global jihadist campaign by using Bitcoin. The blog advises ISIS on how Bitcoin can facilitate the anonymous transfer that suit the needs of an army in jihad. However, the pro-ISIS blog that suggested the funding move did not take the time to consider if Bitcoin was Sharia compliant, something more hardcore Islamic fundamentalists will undoubtedly want to consider.


The pro-ISIS blogpost stokes fears around the world that Bitcoin will be used for terrorist funding, though it is just a suggestion and ISIS is not currently accepting Bitcoin donations at all. In February this year, the Canadian Government warned that Bitcoin could be used as a means of funding terrorism. Indeed, last May, the US Government’s Combating Terrorism Technical Support Office stated that there was a level of concern that: “The introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks.”

The article, Bitcoin and the Charity of Violent physical struggle, advocates the encryption of transactions by the means of Dark Wallet, Thus making it harder for state agencies fighting terrorism to track the transactions. The post later goes on to explain that: “This allows our brothers stuck outside of the ardh Dawlatul-Islam to avoid government taxes along with secretly fund the Mujahideen with no legal danger upon them.” It then goes on to remind Muslims of their need to give to charity, and then seeks to draw a similarity between this sunnah and funding terrorism.

“This system has the potential to revive the lost sunnah of donating to the Mujahideen, it is simple, easy, and we ask Allah to hasten its usage for us.”

 So, what does this mean for Bitcoin? Not what you might think! Let us look, for a moment, at where terror groups receive funding and why they are facilitated to operate. Let me then suggest that one solution to funding of terrorism may well turn out to be Bitcoin. One of the main weapons used to combat terrorism is the targeting of finance. Terrorists with modern weapons are far more effective, particularly in poorer countries, than uneducated and poorly funded fighters. It must be stated that one of the main sources of funding for terrorists is…. governments!

The late Colonel Gadaffi used massive amounts of Libyan oil money to fund many organisations, including, The Black Panther Party, Nation of Islam, Tupamaros, 19th of April Movement and Sandinista National Liberation Front in the Americas, the ANC among others in Africa, the Provisional Irish Republican Army, Action Directe, ETA, the Red Brigades, and the Red Army Faction in Europe, and the Armenian Secret Army, Japanese Red Army, Free Aceh Movement, and Moro National Liberation Front in Asia.  Joseph Stalin funded the North Korean Army, he also provided Adolf Hitler with significant funds in the early days of the Nazi party.  The use of terror as a method of control within the USSR must also not be underestimated. Stalin had a policy of funding Communist Party activities throughout the world, something that Chinese communist also emulated over the decades.

When the USSR invaded Afghanistan the American CIA trained and armed the Taliban, facilitating them to carry out a campaign against the Soviet army. It is undoubtedly, not the only terror group that the US has, on various occasions, assisted throughout the world. There is indeed a fine line between freedom fighter and terrorist; it is often simply a matter of perspective. But, what have all of the above examples got in common? Well, for one thing, most of the organizations have been either stood down or defeated. One other they all have in common is that all of the above examples happened before Bitcoin, the funding they received was in the form of bullion, local currencies, arms and/or training. We know that the organizations were funded because of admissions made. Bitcoin can indeed be used to fund terrorism, but there will be a path; the path may well be encrypted, but there will still be a path. It is this writer’s opinion that Bitcoin will present tools that the state may well choose to use to track terrorist funding.

There is, of course, another matter to be considered. Many financial services providers allow workers to send home money. From London to certain African countries can cost as much as 12.5%. For an economic migrant, sending a portion of their wages home, this is almost criminal. Bitcoin allows almost free money transfers. Not all criminals wear masks, many wear suits. If ISIS is looking at Bitcoin as a means of funding terrorist activity, they are looking at Bitcoin in the same way that Western Union and Visa are looking at it. ISIS is looking for funding and in this it has nothing to hide, doesn’t need to hide its interest for fear of commercial sensitivities.

I have, over the years, visited several mosques including the very beautiful Blue Mosque in Istanbul. I was made feel welcome. I have also visited synagogues, I again felt welcome. Terrorism is not a matter of religion. It is a matter of power. The powerful must never be allowed to target the weak as a means to achieve their own objectives.


Featured image from Shutterstock.

Last modified: February 12, 2020 1:45 PM UTC

PJ Delaney @P.J. Delaney@delboyir

Masters in Public Administration, Bachelors in Mgt., I live in Ireland, I have a bit of a background in Economics and lots of opinions on everything else.

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