Evaluation of Potential Crypto-currency Development Ability in Terrorist Financing

EVIDENCE OF CRYPTOCURRENCY USED BY TERRORIST ORGANIZATIONS

Terrorist organizations use cryptocurrency to trade drugs, weapons, and other items on the black market. For example, “Fund the Islamic Struggle without Leaving a Trace” is a dark website used to transfer bitcoins to jihadis. Some extremists have even published a book, Bitcoin wa Sadaqat al Jihad, which clearly teaches how to transfer valuable bitcoins from North America and Western Europe to jihadists (Weimann, 2016). It has been reported that Bahrun Naim, the planner of the terrorist attacks in Jakarta in 2016, used Bitcoin for virtual payment to transfer funds to the armed elements and finance terrorist activities (Hasbi and Mahzam, 2018). In addition, Islamic law allows the use of Bitcoin and other cryptocurrencies to fund jihadis, and cryptocurrency has become an alternative to the mainstream financial system and legal tender. In June 2015, an American teenager admitted that he had taught Islamic state members how to use Bitcoin. He provided guidance on how to build bitcoin wallets for potential donors and tips on how to use the ‘dark wallet’ service (Irwin and Milad, 2016). The Islamic State often kidnapped and blackmailed Europeans in Syria. By using Bitcoin as a ransom payment tool, terrorists can raise funds and facilitate the transfer of funds. This part of the funds was then used to fund terrorist attacks in Europe (Teichmann, 2018). In addition, there are also many anecdotes about terrorists using cryptocurrency in blackmail schemes online. For example, terrorist analysis requires the use of 1,000 BTC in exchange for a company’s data not to be disclosed (Hampton and Baig, 2015). In January 2016, criminals used ransom- ware to control the computers of the Lincoln Group, demanding a ransom of 500 USD worth of Bitcoin, but they ultimately failed. In November 2015, three Greek banks received blackmail threats, demanding payment of hundreds of thou- sands of euros in Bitcoin (Brown, 2016). In recent years, the amount of evidence of Bitcoin being used in criminal activities has been increasing. Compared with other countries, Indian terrorists and drug syndicates prefer to use Bitcoin for transactions (Misra et al., 2020).