Islamic State Probably Isn’t Using Bitcoin And, If So, They’re Dumb

News that Bitcoin can be tied to the Islamic State circulated on the internet in the wake of the Paris attacks. European Union leaders even held a so-called “emergency meeting” on virtual currencies themselves, reportedly investigating how to better control the currency.

To be sure, evidence that the Islamic State uses Bitcoin in any significant manner is non-existent, the claims specious at best.

Researcher Nicholas Weaver, from the Berkeley-based International Computer Science Institute, is aware of no evidence that the Islamic State uses Bitcoin.

“There was a recent material support plea against a Jihobbiest in the US where, among other things, including apparently attempting to facilitate travel to Syria, the conduct included making a guide for the Islamic State on how to use Bitcoin, but there is no indication of actual use of Bitcoin by IS or any other terrorist,” the Berkeley researcher told The Berkeley researcher, who received a BA in Astrophysics and Computer science in 1995, and his Ph.D in Computer Science in 2013, doesn’t believe Bitcoin provides any real solutions for IS.

“Bitcoin would be poorly suited for Islamic State,” Weaver elucidated. “If a Jihadi, known to authorities, can travel from Syria to Europe, the Jihadi can carry 50,000 euro in just a single, 100-note stack of bills.”

This poses fewer technical issues than Bitcoin. Weaver pondered: “What purpose would Bitcoin solve, since it’s remarkably hard to turn 50,000 euro of Bitcoin into actual money without leaving a trail?” 

With that said, Weaver does believe there are certain aspects of Bitcoin useful to criminals, just not of the terrorist variety.

“Bitcoin is a big problem, but not for terrorism,” the Berkeley researcher said. “It is the currency of online retail drug dealing and extortion, uses which are quite significant: $500k/day in drug deals alone, while estimates of the legitimate Bitcoin commerce is less than $2M/day.” Even then, it’s not the perfect solution.

“Bitcoin is pseudonymous,” Weaver details. “It’s easy to see the flows in Bitcoin, but tying it into identities can be hard. Once you have a suspect’s computer, however, it’s easy, something that Ross Ulbricht learned too well.” The researcher states that, while Bitcoin has some uses for criminals, it’s likely that those uses wouldn’t help terrorists too much.

“I dislike Bitcoin as the electronic money of retail criminality, but it is not the money for [the] terrorist,” he concludes.

Featured image from Shutterstock.

Last modified: May 21, 2020 10:55 AM UTC

November 25, 2015 12:46 AM UTC
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