A recent report by Middle East Research shows that the Palestinian militant group Hamas has been actively using bitcoin for funding. This militant group has been declared as a terrorist organization by western governments. After getting locked out of the traditional financial system, the group has found an alternative way to raise funds.
Sri Lankan Easter bombings were funded using bitcoin
According to a New York Times report, the wing launched a website named Qassam Brigades to raise funding in Bitcoin. Whoever visits the site gets a detailed tutorial on how to send bitcoins without being noticed by the authorities. The report suggests that every visitors receives a unique address where he can send the bitcoins. A Gluck’s report has found that ISIS might have used this strategy to fund Sri Lankan Easter Bombings.
In recent times authorities who trace terrorist fundings are having a hard time as terrorist organizations are adapting to digital currencies for fundings which are very tough to trace back. Sigal Mandelker, the Treasury Department’s undersecretary for terrorism and financial intelligence, said that it is relatively new to the terrorist organizations, but in the future, it is going to increase by many times.
Could this damage the bitcoin’s image?
This incident can heavily damage the image of cryptocurrencies as this can be presented as evidence for the authorities to tighten the regulations on the digital currencies. Many governments all over the world are already skeptic towards the bitcoin and other digital currencies, and this only helps in supporting their hypothesis.
Terrorists are getting smarter with their transactions
Some reports suggest that Bitcoin and other cryptocurrencies are being constantly used by criminal organizations for various purposes. The online drug market is worth 1 billion dollars even after authorities regularly shuts them down. According to terrorism experts, terrorists have been slow to adopt digital currencies because of their sophisticated nature. But they are catching up, and use of bitcoins in fundings have increased.
Hamas, the Palestine terror organization has received fundings from other countries like Qatar and Iran in the past. But now the fundings have been cut short since western governments have put sanctions on the countries. This could also be a major factor in driving these organization to turn to bitcoin and other cryptocurrencies. The executive director of the Middle East Media Research Institute Steven Stalinsky announced that he would be publishing a 253-page report on the increasing use of bitcoin by terrorist organizations. Itsik Levy, the chief executive of Whitestream, said that terrorists are learning a new and smarter way to send and receive digital currency.
Terrorists are using social media to promote bitcoin fundings
Last month Abu Mohammad al-Julan, the leader of the terrorist organization Hayat Tahrir al-Sham in Syria posted a long video on his social media account explaining the functions of bitcoins and how it is permissible to use it for donation purposes. Syrian Militants have also used Telegram to ask their followers to donate bitcoins.
Israeli research firm, Whitestream found that Hamas used American based wallet Coinbase to keep their funds. When Coinbase found out about that, they immediately froze the accounts and informed the American authorities. Later the organization changed its methods by not keeping all their funds at one place and decided to give out different bitcoin addresses to each visitor. Islamic State’s media site used the same strategy. Itsik Levy, the chief executive of Whitestream, said that terrorists are learning a new and smarter way to send and receive digital currency.
All is not lost
Many terrorist organization still consider cash to be the best option for funding as bitcoin is not yet widely accepted in the market. According to a research by RAND corporation, if terror organizations start using bitcoin and other cryptocurrencies for funding on a large scale, it would be challenging for them to manage funds. And the current ecosystem does not provide that kind of anonymity so that big terror organizations can without risk keep their fundings.
Now authorities all over the world are pushing crypto wallet and exchange firms to complete KYC of their users before letting them use their services. Many experts believe that there is still time to curb down terror fundings in cryptocurrencies by taking serious measures.