A press release published on September 7 revealed that the U.S. Congress Subcommittee on Terrorism and Illicit Finance held a meeting to discuss cryptocurrency and terrorism financing.
The hearing took a long look at the threats posed by terrorism and the methods of financing terrorists, including lifelines such as traditional financial institutions, the hawala exchange, and cryptocurrencies.
A Poor Way Of Financing Armed Struggle
However, Yaya Fanusie, Director of Analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance told the House Financial Services Committee that “Cold hard cash is still king,” with fiat currencies remaining the most anonymous method for funding terrorism.
Fanusie explained that most terrorists are in environments where cryptocurrencies are not operable, making fiat currencies the money of choice for buying goods and services.
He still acknowledges that while terrorists have had little success in raising funds via cryptocurrencies, terrorist backers still run cryptocurrency funding campaigns.
“Terrorist groups regularly adapt their methods to their available resources, skill levels, and the opportunities presented in their target areas of operations. This is as true for financing as it is for plotting attacks. Terrorist organizations have a long history of exploiting banks and other traditional financial institutions, as well as semi-formal means of transferring funds, such as the hawala exchange system. But emerging financial technologies offer new channels to raise and move funds.”
Fanusie also recommends that authorities on the trail of terrorist financiers should focus on exchanges that specialize in privacy coins, instead of on major exchanges that have taken steps to improve their anti-money laundering (AML) and know-your-customer (KYC) policies over the past few years.
Trading With Confidence
Several public and private groups have started taking steps to help prevent terrorism financing via cryptocurrencies. Just last year, risk management firm LexisNexis teamed up with crypto exchange Blockbin to launch a security solution for crypto exchanges. Dubbed “Trade with Confidence,” the platform is intended to prevent terrorism financing, alongside other illegal activities.
Meanwhile, In January 208, Ted Budd (R-NC) introduced a bill that aims to prevent terrorist attacks by offering rewards for information that leads to the arrest and conviction of cryptocurrency-supported terrorist financiers.
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