The use of Bitcoin and cryptocurrencies for terrorism and criminal purposes has long been discussed. There have been countless cases of ransomware (malware that restricts access to a user’s systems and data and requires a ransom to be paid in order to make them accessible again), such as the recent case in the Lazio region, where hackers demanded a ransom in Bitcoin.
Anonymity and speed of transfer are the weapons that Bitcoin offers to criminals and terrorists
Some countries, such as Cuba, Venezuela, Iran and North Korea, are said to be using cryptocurrencies to circumvent the strict embargo promoted by the international community.
The substantial anonymity of cryptocurrencies is perfectly suited to those who want to commit illicit activities.
The fact that the proselytization of terrorism, especially Islamist terrorism, is now also taking place online makes digital currencies a useful tool for financing these criminal activities.
On 6 July, the Leicester police arrested Hisham Chaudhary, a supporter of Islamic Jihad, who was accused of sending thousands of dollars in Bitcoin to a terrorist group operating in Syria.
In 2020, Israeli authorities discovered a cryptographic address of a virtual Bitcoin wallet linked to the Palestinian terrorist group Hamas, in which about 28 million dollars would have flowed in two years, probably used to finance the group’s terrorist activities.
Bitcoin and terrorism
According to estimates by the University of Sydney, an estimated 43% of Bitcoin transactions are used for criminal activities (about 72 billion dollars).
Rob Wainwright, the former director of Europol, recently stated that cryptocurrencies account for about 3 – 4 billion euros, about 3 to 4% of the illicit proceeds laundered annually in Europe alone.
Latin America and the Caribbean hosted the first major international virtual currency laundering scandal in 2013, laundering $6 billion in illicit transactions related to drug trafficking, investment fraud, credit card fraud and data theft.
The interest of global Islamic terrorist groups, such as Daesh or Al Qaeda, in cryptocurrencies, is not new; they have been analyzing and encouraging their use since the first introduction of this modern financial instrument into the market.
The fact that transfers are anonymous and immediate makes them perfect for financing criminal or terrorist activities, which before the invention of Bitcoin used a network that equally guaranteed anonymity, Hawala, but was still more expensive and slower than transferring money via cryptocurrencies.
Special units and laws to combat illicit bitcoin funding
Financial and law enforcement authorities are increasingly focusing on investigating criminal activity funded through digital currencies. In 2019, the United States, in order to deal with this increase in the use of cryptocurrencies by terrorist groups, created an ad hoc law that shaped a Financial Technology task force, specifically to track suspicious money movements.
In 2019, Australia passed “the Anti-Money Laundering And Counter Terrorism Financing Act“, which for the first time created a technology task force to deal with tracking digital currency money movements. Similar structures have been created in Korea, Great Britain, and Estonia.
A new autonomous cybersecurity section should soon take shape in our country with a section dedicated precisely to the world of cryptocurrencies and their potential criminal uses.