Bitcoin’s role in terrorism worries U.S. authorities

Ben Kothe / BuzzFeed News; Getty Images (3)

Who to promote People who call themselves Azym Abdullah don’t need a lot of money to build a website for ISIS that can play terrible beheading videos. What he needs is confidentiality, so according to reports, in 2014, he switched to cryptocurrency.

He spent more than 1 bitcoin (approximately US$400 at the time) to register a domain name in Iceland and host it on servers around the world. His website asks visitors to donate money to help pay for maintenance. Those are also Bitcoins.

By sending donations in this way, his donors can use a string of letters and numbers to conceal their identity. This popular technology makes it more difficult for banks, law enforcement agencies, and the U.S. Treasury Department to track and slow down the flow of funds that support terrorism.

Abdullah’s reliance on Bitcoin was documented in an intelligence assessment conducted by the US Treasury Department in 2017. The report was received by BuzzFeed News as a series of documents including internal emails and reports on cryptocurrencies. a part of. The intelligence assessment also revealed evidence of nine other terrorist incidents. Supporters of terrorists used cryptocurrency to fund their activities, from buying air tickets to sabotaging political websites to arranging trips to Syria.

The vast majority of encrypted transactions are used for legal purchases. But these documents provide insights into the ongoing, sometimes lagging battle of the U.S. government to resist the use of encryption to fuel terrorism and crime, as well as various methods of encryption (assuming anonymity and ease of transfer across the globe. ) Can be used for evil purposes.

For example, in 2016, analysts from the U.S. Department of the Treasury’s Financial Crime Enforcement Network (FinCEN) sounded an alarm about so-called mixers, companies that divide encrypted transactions into smaller parts to further protect the identity of the owner. When these companies operate in the United States, they should register with FinCEN and provide information about suspicious customers and transactions. But the report is one of the documents received by BuzzFeed News and found that “out of the 30 largest hybrid services, none of them are registered… or show evidence of any compliance program.”

It was not until nearly four years later that the government took action. Last year, FinCEN fined One of the mixers, $60 million, because it failed to “collect and verify customer names, addresses, and other identifiers in more than 1.2 million transactions.” The government found that these transactions helped criminals engage in illegal narcotics, fraud, counterfeiting and exploitation of children, as well as neo-Nazis and other white supremacist groups.Financial Center Say It tracks transactions worth more than $2,000 from traders from the mixer to a website Welcome to watch the video Hosted child sexual abuse materials.

The documents reviewed by BuzzFeed News traced at least 10 years of Treasury Department concerns about encryption technology. FinCEN is now trying Change the rules Therefore, any company dealing with cryptocurrency must obtain clearer information about its customers and their transactions.

FinCEN and the Ministry of Justice did not respond to messages seeking comment.

BuzzFeed News by Alex Fradkin

Financial Crime Enforcement Network Office of the U.S. Department of the Treasury, located in Vienna, Virginia

Yaya Fanusie, a former CIA analyst and expert on national security issues related to cryptocurrencies, said he believes that US officials are ahead of their European counterparts in solving this problem. However, like other experts contacted by BuzzFeed News, he said that he believes that a new type of financial investigator is needed to prevent cryptocurrency from being abused by terrorists, drug dealers and other criminals.

“For locals, cryptocurrency is more difficult to understand than more traditional money laundering methods,” said Fannusi, now a senior researcher at the Center for New American Security. “It’s only recently that skills and resources have been deployed on-site.”

With the slow adjustment of regulators and the industry, the attractiveness of cryptocurrency remains strong, and terrorists have found that they can use it to raise donations to fund operations.Ministry of Justice last August Announce An investigation in cooperation with the Ministry of Finance has seized millions of dollars as part of “the largest ever seizure of a terrorist organization’s cryptocurrency account.”

one of indictment Describes how Al Qaeda and its affiliates conduct money laundering activities, which collect donations in the form of cryptocurrency through social media accounts. They then used the network to make donations to “further achieve terrorist goals.” One of the Al-Qaida-related networks tracked by the government received more than 15 out of 187 transactions between February 5 and February 2019. Bitcoin is worth thousands of dollars. 25th 25th, 2020

Encryption technology is pressing the same weaknesses that the financial system first explored. FinCEN file, Is a global project initiated by BuzzFeed News and the International Association of Investigative Journalists at the end of 2020. These news organizations found that from the perspective of the US authorities, major Western financial institutions allowed dirty funds to flow around the world. Like traditional currencies, Bitcoin and other cryptocurrencies can test the ability of financial institutions to track transactions and the ability of US authorities to fight crime.

During the nomination hearing of the Senate Finance Committee, the incoming Treasury Secretary Janet Yellen (Janet Yellen) Say Cryptocurrency has the potential to “improve the efficiency of the financial system.”

She said: “At the same time, it can be used to finance terrorism, promote money laundering activities, and support vicious activities that threaten the national security interests of the United States and the integrity of the United States and the international financial system.”

Swimming Pool/Getty Images

Janet Yellen at the Senate Finance Committee hearing on January 19

Cryptocurrency is easier to transfer than other financial instruments, allowing criminals to quickly transfer assets to different parts of the world, which is an advantage when trying to avoid being scrutinized by US law enforcement agencies or when it is imminent.

Pawel Kuskowski, CEO of Coinfirm, a cryptocurrency analysis and compliance company, said: “You can escape to irrelevant jurisdictions or entities. This is a mechanism designed to protect yourself from knowing that you are about to receive illegal funds.”

Currently, thousands of different virtual currencies are traded in an evolving market characterized by secrecy. Usually, cryptocurrency owners obtain these funds on exchanges and store them in virtual wallets whose addresses are specified only by a unique arrangement of letters and numbers-another layer of anonymity obscures who actually owns the funds.

Just as banks are responsible for monitoring the transactions of their customers, cryptocurrency exchanges also have legal obligations. They even send suspicious activity reports or SARs to the government, the same format used by banks when they encounter transactions that imply criminal activity.

But some exchanges are opposing FinCEN’s proposal for stricter regulations, which describe requirements as more difficult than those faced by the banking industry. Twitter CEO Jack Dorsey (Jack Dorsey) founded the payment company Square (Square), and Andreessen Horowitz (Andreessen Horowitz) and other investment companies also said that the new regulations will be a heavy burden and may violate Customer privacy.

The Electronic Frontier Foundation wrote in a public comment letter earlier this year that it believes that FinCEN’s proposed regulations will “undermine the civil liberties of cryptocurrency users” and “enable the government to obtain large amounts of sensitive financial data.” ?

Source link