The Role Of Bitcoin In Terrorism Suffers US Authorities

Ben Kothe / BuzzFeed News; Getty Images (3)

The scatterer who calling himself Azym Abdullah didn’t need a lot of money to set up a website for ISIS to broadcast horrific head-to-head videos. All he had to do was hide, so in 2014 it was reported that he went out of cryptocurrency.

He paid a little more than 1 bitcoin, approximately $ 400 at this time, to register the domain name in Iceland and host it on servers around the world. Her site asks visitors for donations to help pay for the care. That, too, is in bitcoin.

Sending donations thus allows its donors to protect their identities on the back of certain letters and numbers – a preferred method that makes it even more difficult for banks, law enforcement authorities, and the Department of U.S. Treasury to monitor and slow the flow of money that supports terrorism.

Abdullah’s reliance on bitcoin was documented in a 2017 Treasury Department intelligence survey, received by BuzzFeed News as part of a cache of documents containing email messages and reports about the cryptocurrency. The intelligence analysis also revealed evidence of nine other incidents in which terrorist supporters used cryptocurrency to fund their activities, from buying airline tickets to hacking a political website to arranging travel to Syria.

Most crypto transactions are used for legitimate purchases. Although the documents provide information on the ongoing sometimes, sometimes remaining, struggle to curb the use of crypto technology to promote terrorism and crime, as well as the various ways that crypto – which boasts anonymity and ease of access. transfer around the world – can be used for malicious purposes.

For example, in 2016, analysts at the U.S. Treasury Department’s financial Crime Enforcement Network, or FinCEN, raised alarms about so -called mixers – companies that break up crypto transactions into small pieces to much more to protect the identity of the owner. If companies operate in the U.S., they must register with FinCEN and provide information about suspicious clients and transactions. But the report, which accompanies documents received by BuzzFeed News, found that “of the 30 most popular mixing services, none registered… or showed any evidence of a compliance program.”

It wasn’t until almost four years ago that the government took action. Last year, FinCEN fined one of the combined $ 60 million for failing to “collect and verify the names, addresses, and other customers of more than 1.2 million transactions.” The transactions, the government found, helped criminals involved in illegal narcotics, fraud, counterfeiting, and child exploitation as well as neo-Nazis and other white supremacist groups. FinCEN SAYS it tracks transactions worth more than $ 2,000 from the mixer to a website called Happy Coming Video hosting child sexual abuse materials.

Documents reviewed by BuzzFeed News trace the Treasury Department’s concerns about crypto technology back in at least 10 years. FinCEN is now being tested change its laws so that any company dealing with cryptocurrency should be able to obtain clear information about their customers and their transactions.

FinCEN and the Department of Justice did not respond to messages requesting comment.

Alex Fradkin for BuzzFeed News

The office of the Financial Crime Enforcement Network, part of the U.S. Treasury Department, in Vienna, Virginia

Yaya Fanusie, a former CIA analyst and expert on the national security implications associated with cryptocurrency, said she believes U.S. officials are ahead of their European counterparts in addressing the issue. However, like other experts contacted by BuzzFeed News, he said he sees the need for a new class of financial investigators to stop cryptocurrency from being abused by terrorists, narcotraffickers, and other criminals.

“For the people of the land, crypto is much harder to understand compared to the more traditional way of making money,” said Fanusie, now a senior fellow at the Center for a New American Security. “Only now are skills and resources being sent to the field level.”

As regulators and the industry slowly adjust, the appeal of crypto remains strong, with terrorists seeing that they can use it to solicit donations to fund operations. In August the Department of Justice Office has partnered that an investigation conducted in cooperation with the Treasury Department yielded millions of dollars as part of “the most seized cryptocurrency accounts by terrorists.”

One of the allegations described how al-Qaeda and allied groups ran a money laundering operation soliciting crypto donations to social media accounts. They use that network for donations “to further their terrorist purposes.” One of al-Qaeda’s partner networks tracked by the government received more than 15 bitcoins, worth thousands of dollars, in 187 transactions between Feb. 5, 2019, and Feb. 25, 2020.

Crypto technology maintains the same weak spots in the financial system that were first explored in FinCEN Files, a global project of BuzzFeed News and the International Consortium of Investigative Journalists in late 2020. News organizations have found that major Western financial institutions allow dirty money to circulate around the world in the simple view of the US authorities. Like traditional currency, bitcoin and other cryptocurrencies can test the ability of financial institutions to track their transactions, and the ability of U.S. authorities to prevent crime.

At her hearing of the nomination before the Senate Finance Committee, future Treasury Secretary Janet Yellen SAYS that cryptocurrency has the potential “to improve the efficiency of the financial system.”

“At the same time,” he said, “it can be used to fund terrorism, facilitate money laundering, and support nefarious activities that threaten U.S. national security interests and the integrity of U.S. and international affairs. financial systems. “

Pool / Getty Images

Janet Yellen at a Senate Finance Committee hearing, Jan. 19

Cryptocurrency is more volatile than other financial instruments, allowing criminals to easily transfer assets to different parts of the world – an advantage when trying to avoid U.S. law enforcement scrutiny or when approaching see detection.

“You can run away from jurisdiction or entities that don’t care,” says Pawel Kuskowski, CEO of Coinfirm, a cryptocurrency analytics and tracking firm. “It’s a designed mechanism to protect themselves knowing they’ll receive banned funding.”

Today there are thousands of different virtual currencies being sold in an ever-changing market marked by hiding. Typically, cryptocurrency owners obtain these funds in an exchange and store them in virtual wallets with addresses assigned only to unique sequences of letters and numbers-another layer of identification that hides who is the real owner of the funds.

Just as banks are responsible for monitoring the transactions of their customers, crypto exchanges have legal obligations that must be fulfilled. They even send the government suspicious activity reports, or SARs, the same forms banks use when they encounter a transaction suggesting criminal activity.

Yet some exchanges hold back against FinCEN’s proposal for stricter regulations, which portrays requirements as more onerous than those faced by the banking industry. The square, the payment firm founded by Twitter CEO Jack Dorsey, and firms firm like Andreessen Horowitz also say the new rules are burdensome and could violate clients ’privacy rights.

The Electronic Frontier Foundation wrote in a public comment letter earlier this year that it thought FinCEN’s proposed regulations would “harm the civil liberties of cryptocurrency users” and “give the government access to troops. sensitive to financial data. ” ●

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