The role of Bitcoin in terrorism worries US authorities

Ben Kothe / BuzzFeed News; Gate Figure (3)

Who is the preacher? Azam Abdullah himself said that it would not take much money for ISIS to set up a website that would broadcast videos of deadly beheadings. All he needed was privacy, so in 2014 he reportedly turned to cryptocurrency

He paid around 400 400 more in time around 1 bitcoin to register the domain name in Iceland and host it on servers around the world. His site asked visitors to donate money to take care of him. They were, bitcoin.

The sending of donations was able to protect the identities of its donors behind a line of letters and numbers – an optimal strategy that has made it harder for banks, law enforcement and the U.S. Treasury Department to track and slow the flow of money supporting terrorism.

Abdullah’s reliance on Bitcoin was documented in the 2017 Treasury Department intelligence assessment, which received BuzzFeed News as part of a cache of documents that included reports on internal emails and cryptocurrencies. The intelligence assessment found evidence of nine more cases where terrorist supporters used cryptocurrency to fund their activities, from buying plane tickets to trivializing a political website in order to travel to Syria.

A large number of crypto transactions are used for legitimate purchases. However, the documents provide insights into the US government’s ongoing, sometimes backward, use of crypto technology to combat terrorism and crime, as well as provide a variety of crypto insights – with its anonymous name and ease of transfer worldwide – to be used for stingy purposes.

For example, in 2001, analysts at the U.S. Treasury’s Financial Crime Enforcement Network, or Finsen, raised concerns about so-called mixers – companies that cut crypto transactions into smaller pieces to further secure the owner’s identity when the U.S. merged into these firms. With registration and providing information about suspicious clients and transactions. But one of the documents obtained by BuzzFeed News, the report found, found that “none of the 30 largest mixing services were registered … or showed any evidence of a compliance program.”

Even after almost four years, the government has not taken this step. Last year, FinCEN Fine A mixer costs 60 60 million to collect and verify customer names, addresses and other identifiers. These transactions, the government found, involved criminals involved in illegal drugs, fraud, forgery, and child exploitation, as well as those involved with neo-Nazis and other white hegemonic groups. FinCEN Dr. It tracks over $ 2,000 transactions called from Mixer to a website Welcome to the video That hosted child sexual abuse content.

Documents examined by BuzzFeed News identified Treasury Department concerns at least 10 years ago. Finken is trying now Change its rules So any company that works with cryptocurrencies needs to get more clear information about their customers and their transactions.

Finken and the Department of Justice did not respond to requests for comment.

Alex Fredkin for BuzzFeed News

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

Ya Fanusi, a former CIA analyst and expert on the national security implications of cryptocurrency, said he believes U.S. officials are ahead of their European counterparts in tackling the issue. However, like other experts who contacted BuzzFeed News, he said he saw the need for a new class of financial investigators to prevent cryptocurrencies from being misused by terrorists, drugs and other criminals.

“People on the ground find it difficult to understand crypto when compared to conventional methods of money laundering,” said Fanusi, a senior fellow at the New American Security Center. “Only field level skills and resources are being established.”

As regulators and industry gradually adjust, the persuasion of crypto remains strong, with terrorists finding that they can use it to fund money. The judiciary last August Announcement An investigation conducted in collaboration with the Treasury Department seized millions of dollars as part of “the largest ever seizure of a terrorist organization’s cryptocurrency accounts.”

One of them Complaint How al-Qaeda and its affiliates carried out a money laundering operation by applying for grants in crypto on social media accounts. They then used the network to fundraise “to further their terrorist goals.” A network linked to al-Qaeda tracked by the government received more than 15 bitcoins worth thousands of dollars in 187 transactions between February 5, 2019 and February. 25, 2020.

Crypto technology is first explored by pressing the same weak spots in the financial system Finken fileIn late 2020, a global project organization of BuzzFeed News and the International Union of Investigative Journalists found that Western financial institutions allowed dirty money around the world in the simplest eyes of U.S. authorities. Like traditional currencies, Bitcoin and other crypto financial institutions can test their ability to track transactions and the ability of U.S. authorities to thwart crime.

The hearing of his nomination before the Senate Finance Committee was attended by Treasury Secretary Janet Yellen Y. Dr. That cryptocurrency has the potential to “improve the efficiency of the financial system”.

“At the same time,” he said, “it could be used to finance terrorism, to facilitate money laundering, and to support activities that threaten US national security interests and the integrity of the United States and the international financial system.”

Pool / Getty Images

Janet Yellen during the Senate Finance Committee hearing, Jan. 19

Cryptocurrency is easier to navigate than other financial instruments, allowing criminals to quickly transfer assets to different parts of the world – an advantage when U.S. law enforcement is trying to sort out a verification or detection that seems imminent.

Pavel Kuskowski, chief executive of cryptocurrency analytics and compliance firm Coinfirm, said: “You can run away without any jurisdiction or authority. It’s a well-designed process to protect themselves knowing they’re going to get illegal funding. “

There are currently thousands of different virtual currencies being traded in a steady-evolving market marked as privacy. Typically, cryptocurrency owners acquire these funds in an exchange and store them in a virtual wallet with an address designated only by a unique arrangement of letters and numbers – another level of anonymity that obscures who actually owns the funds.

Just as banks are responsible for monitoring the transactions of their customers, crypto exchanges also have a legal obligation to meet even if they send suspicious activity reports, or SARs, to the government when they encounter a transaction that suggests criminal activity.

Some exchanges, however, are pushing back against Finsen’s proposal for stricter regulations, describing the requirements as more stringent than those facing the banking industry. Investment companies such as Square, a payment company founded by Twitter CEO Jack Dorsey, and Anderson Horowitz, also said the new rules were understandable and could violate clients’ right to privacy.

The Electronic Frontier Foundation wrote in a public comment letter earlier this year that it thought Finken’s proposed rules would “infringe on the civil liberties of cryptocurrency users” and “give the government access to sensitive financial information.” ●

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