Regulators Need to Take Action on Crypto-Funded Terrorism


As regulators and decision-makers debate the future of cryptocurrencies in the economy, early adopters, including terrorists and violent extremists, are taking advantage of a law enforcement blind spot. The ease by which money laundering and terrorist financing is possible with cryptos, especially the more dangerous privacy coins, is becoming a serious security issue due to inaction from the authorities.

The indictment of a New York woman for sending funds to Hay’at Tahrir al-Sham — designated a Foreign Terrorist Organization by the US and UN — is an anomaly, not the norm. But this does not mean that terrorist financing is an infrequent event. Rather, the few prosecutions that have been announced highlight the constraints of law enforcement capabilities in the US and around the world, a dilemma that should be addressed.

Value of crypto received by illicit address, 2017-2022. Source: Chainalysis

Hans-Jakob Schindler worked on the United Nations Security Council’s ISIL, al Qaeda and Taliban Monitoring Team from 2013–2018 prior to becoming senior director of the Counter Extremism Project. He holds a Ph.D. in international relations/international terrorism from the University of St. Andrews.

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