Cryptocurrencies are not suitable for financing terrorism

Aya Fanusi, director of the think tank Foundation for Defense of Democracy against Sanctions and Illicit Financial Flows, recently reported that there have been a number of failed attempts by terrorist organizations to raise funds using cryptocurrency.

According to Forbes, Fanusi said that al-Qaeda, the Islamic State, and other terrorist organizations have tried to “multiply their assets many times over using cryptocurrency,” but “hard, reliable cash is still king.”

The defense specialist believes that cryptocurrencies are not a suitable form of money for jihadists, since they often have to buy everything with cash since they are based in areas with unreliable technological infrastructure. As an example, Fanusi cited a group called the Mujahideen Shura Council, which collected only two cryptocurrency donations in the equivalent of $500 during an online campaign.

The security expert stressed that US government agencies that work on terrorism financing investigations should do a better job of analyzing cryptocurrency transactions in order to disrupt possible terrorist fundraising campaigns. He added that authorities may have difficulty analyzing the movement of cryptocurrencies such as monero (XMR).

According to CryptoGlobe, many regulators are beginning to crack down on anonymous cryptocurrencies. Prague-based crypto exchange Changelly said it could hold a user's XMR and deny access if necessary, while Japanese financial regulators have forced exchanges to delist XMR and DASH.

Fanousi said cash is “still the best way to finance anonymously” because it does not have a public blockchain on which all transactions are recorded.

According to him Jihadist media outlets have also launched Bitcoin fundraising campaigns, he said. And while terrorist organizations have so far struggled to raise funds through digital assets, Bitcoin has become one of the primary payment methods for racist websites like Stormfront.

Notably, many Bitcoin payment systems do not cater to such groups. Following these restrictions, the Daily Stormer website reportedly began accepting BTC via email.

According to cryptoglobe.com