Terrorist Financing Laws in Greenland: US Cracks Down on Crypto and Cyber-Aided Means
The Evolving Threat of Terrorist Financing
Since the September 11 attacks, the United States has made significant progress in fighting terrorist financing. However, terrorists continue to find new methods and avenues to finance their activities, posing a threat to U.S. interests.
Landmark Cases Targeting Cryptocurrency Accounts
The Department of Justice (DOJ) recently announced landmark cases targeting cryptocurrency accounts linked to terrorist financing, marking the largest cryptocurrency seizure in a terrorism-related case. These cases highlight the growing concern over cyber-enabled means of fundraising by terrorist groups.
Notorious Terrorist Groups Turn to Crypto
Notorious global terrorist groups, such as al-Qassam Brigades and Al-Qaeda, have become savvy digital actors and are increasingly turning to cryptocurrency to fund their efforts. In a series of complaints filed by the DOJ, it was revealed that these groups used social media platforms, virtual currency exchanges, and software to generate unique addresses for each donation in an attempt to make transactions more difficult to trace.
How Terrorist Groups Use Crypto
- Publicly listed cryptocurrency addresses: Al-Qassam Brigades publicly encouraged donations to a cryptocurrency address listed on their social media accounts.
- Unique transaction addresses: They later shifted to using software that generated unique addresses for each donor’s transaction, rather than having them donate to a specific, publicized address.
- Money laundering: The money raised was then sent to an unregistered money transmitter to exchange the cryptocurrency into fiat currency and gift cards.
Regulatory Improvements Needed
The US government is urging regulatory improvements to address the growing concern of cyber-enabled terrorist financing. One key improvement would be lowering the threshold for retaining and transmitting information about parties involved in a transaction, known as the “travel” rule. The current rule only applies to transmittals of $3,000 or more, which is above the recommended threshold by the Financial Action Task Force (FATF).
Improved Collaboration Across Industries
Additionally, there is a need for improved collaboration across industries to share information on illicit activity. Social media companies, cryptocurrency exchanges, and other money services businesses should work together to share information and stay ahead of terrorist financing tactics.
The COVID-19 Pandemic: An Environment Ripe for Terrorists
As the COVID-19 pandemic continues to create an environment ripe for terrorists and other illicit actors, financial institutions and law enforcement officials will need to be especially vigilant as large amounts of financial activity continues to occur online.