Better crypto monitoring needed but ‘cash is still king’ in terror funding
While the world needs to prepare and prevent increasing use of cryptocurrencies to fund terrorism, it is a poor form of fundraising in an environment where cash is still king.
These were some of the findings of a US Congressional hearing on Friday by the Financial Services Committee: Examining terrorist groups and their means of financing illicit activity.
Sub-committee chairman said: “Terrorist organisations cannot function without financial resources to organise and carry out their violent actions.
“It is imperative that Congress understand the nature of these threats that are currently facing the nation and the world, in order to do all they can to put an end to these illicit acts.”
The sub-committee was told that cryptocurrencies were a poor form of money for terrorists because they need to purchase arms and explosives on black markets where cash is the only acceptable form of payment.
Cash is king
“Cold hard cash is still king,” said Yaya Fanusie, director of analysis for the Foundation For Defense of Democracies.
Indeed, cash – despite the anonymity claims of cryptos and blockchain – remains the favoured method of funding by terror groups because of the difficulty in tracing cash transactions, Fanusie added.
Yet, he said, government bodies responsible for investigating terrorist finance must become better enabled to analyse cryptocurrency transactions.
“By preparing now for terrorists’ increasing usage of cryptocurrencies, the US can limit the ability to turn digital currency markets into a sanctuary for illicit finance,” Fanusie concluded.