Cash Remains Main Source of Terrorist Funding
According to a recent statement issued during a United States Congress meeting, terrorist organizations have displayed an interest in virtual currencies however it is among the least favourable mode to fund their operations. According to Forbes, an expert has concluded that contrary to popular belief, cryptocurrency is not a practical option to fund illegal or even terrorist activities.
Cash Remains King
The head analyst for the CSIF, Yaya Fanusie, stated that among all modes of financing, cash still remains the most sought after for terrorist organizations. Throughout his presentation to the FSC, Fanusie highlighted examples in which terrorists organizations, such as the Mujahideen Shura Council, failed in attempting to utilize cryptocurrency for laundering purposes. He noted that the main obstacle digital assets present for jihadist organizations is that they must first be exchanged into a fiat currency in order to actually be used. This prolongs the process and can lead to further complications and increase traceability.
A Warning On Privacy Coins
Anonymity in itself is the ultimate necessity for these groups, and cash alone offers that security. In terms of cryptocurrency, transactions and spending patterns can be traced through cursory investigations on public blockchains. However, tracking such activities could become problematic in terms of privacy coins. Privacy coins in particular, Fanusie explained, obscure data linking to user identification and other traceable activities making it more of a challenge for authorities to locate sources of terrorist funding.
The presentation noted that although cash will always be the main goal for such illegal activities, the United States can begin to limit such illicit financing within the digital currency market by preparing in advance. US officials from the secret service have issued a testimony this June that aims to address obstacles privacy coins may pose. Strategies to tackle the anonymity of privacy coins remain unannounced.