Evaluation of Potential Crypto-currency Development Ability in Terrorist Financing

THE MOTIVATION OF TERRORIST ORGANIZATIONS
USING CRYPTOCURRENCY

Feng and Ding (2019) discussed why cryptocurrency was used by terrorist organizations from the perspective of cryptocurrency’s attributes, namely, its anonymity, decentralization, and globalization. Brill and Keene (2014) argued that the irreversibility of cryptocurrency transactions and low transaction costs are why cryptocurrency is attractive to terrorist financing. In contrast, cryptocurrency is not attractive to terrorist financing because of the large fluctuation of cryptocurrency prices, the lack of trust mechanisms, the difficulty of conversion to main currencies, and the maturity of global fund tracking technology. Xu and Zou (2018) argue that because the supply of cryptocurrency is not flexible, the currency itself lacks internal value support and credit guarantee, and the price of cryptocurrency can be manipulated, so terrorist organizations have shown certain restrictions on its use.

Eaddy (2019) explained the factors influencing the use of cryptocurrency by terrorist organizations based on the information and communication technology development index, currency exchange restrictions, cryptocurrency price fluctuations, and anti-Western sentiment. The RAND Corporation’s research has shown that existing financial infrastructure is weak in developing countries or areas with internal turmoil. Therefore, venture capital is attractive to terrorist organizations. Terrorist organizations employ cryptocurrencies to create venture capital and obtain higher funds (Baron et al., 2015). A key element of cyberterrorism is the use of cryptocurrencies, such as Bitcoin, to buy and sell prohibited goods and services on the dark web. Jacobson (2010) and Weimann (2016) believe that given the geographic range, speed, and degree of anonymity provided by the dark web, it will attract terrorists. The dark web is likely to be an extremely effective and secretive platform for terrorists to use crypto currency.
MEASURES AGAINST THE USE OF