FCA Turns To Bitcoin Experts As It Steps Up Fight Against Crypto-Funded Terrorists
He adds that the expansion of crypto assets and social media platforms as a model for terrorist financing has resulted in several cases of states suffering from a concentrated wave of international terrorism.
In the United States, there have been several terrorist financing convictions involving crypto assets. In Virginia in 2015, Ali Shukri Amin was sentenced to 11 years in prison for using his Twitter account to advise ISIS on how to use Bitcoin, and in 2017, Zoobia Shahnaz from Long Island was arrested by the FBI. after attempting to transfer $ 62,000 (£ 46,500) worth of Bitcoin to the jihadist group.
Across the pond, the FCA estimated in 2018 that between £ 3-4 billion is laundered annually through crypto assets in the UK and the EU. Yet this estimate would represent only a small percentage of the money laundered within the bloc.
Extremists use crypto assets to trade items like weapons and drugs on the black market and even set up effective crowdfunding sites on the dark web where supporters can donate.
For example, “Fund the Islamic Struggle Without Leaving a Race” is a dark web page used to transfer bitcoins to jihadists. Some extremists have even published books that teach their followers how to transfer Bitcoins from Western countries to jihadists.
But as the oversight of regulators and criminal agencies increases, so does the creativity of those they try to catch.
Ryder remembers an FBI agent working in the financial crime field who recently told him it was a “good day” when law enforcement was only three steps behind the criminals.
But extremists are also increasingly concerned with security and are moving away from popular crypto assets like Bitcoin to more specialized and less regulated coins.
Jihadist groups have also started trading crypto assets themselves in an attempt to profit from highly volatile markets, offering technical analysis courses to young recruits.
Officials hope that improved surveillance capabilities will allow them to track and identify those who use cryptocurrencies for illicit purposes, leading to more convictions like the one inflicted on Chaudhary.
During his trial in Birmingham Crown Court earlier this year, Chaudhary attempted to claim that the funding he was transferring to ISIS was for “humanitarian purposes”.
In response, the judge said: “You are an intelligent man, but unfortunately your actions demonstrate that you are an extremist determined to promote a terrorist program for the Islamic State”.
“There is no reason to believe that you will give up these views lightly, and I conclude that you are and will likely remain a dangerous offender for the foreseeable future.”