{"id":4141,"date":"2023-05-01T07:20:51","date_gmt":"2023-05-01T11:20:51","guid":{"rendered":"http:\/\/leadingcryptonews.com\/the-feds-must-rein-in-crypto-financed-terrorism\/"},"modified":"2023-05-01T07:20:51","modified_gmt":"2023-05-01T11:20:51","slug":"the-feds-must-rein-in-crypto-financed-terrorism","status":"publish","type":"post","link":"https:\/\/leadingcryptonews.com\/the-feds-must-rein-in-crypto-financed-terrorism\/","title":{"rendered":"The feds must rein in crypto-financed terrorism"},"content":{"rendered":"


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While regulators and policymakers dither and try to decide if cryptocurrencies have a future in the economy, early adopters, including terrorists and violent extremists, are exploiting a law enforcement blind spot. The ease by which money laundering and terrorism financing take place with cryptocurrencies and the more dangerous\u00a0privacy coins are becoming a security threat of our own making through bureaucratic inaction.<\/p>\n

The recent indictment of a New York woman accused of sending funds to Hay\u2019at Tahrir al-Sham \u2014 designated by the United States and United Nations as a Foreign Terrorist Organization \u2014 is newsworthy because it\u2019s the exception, not the rule. But this does not necessarily mean that financing terrorism with cryptocurrencies is itself a rare event. Rather, the few prosecutions that have been announced reflect the limitations of law enforcement\u2019s capabilities in the United States and around the world \u2014 a problem that can and should be solved.<\/p>\n

The U.S. has only a small group of dedicated law enforcement personnel to track and seize cryptocurrencies used for criminal purposes. Agents responsible are also tasked with investigating all aspects of the misuse of cryptocurrencies ranging from extortion and money laundering to sanctions evasion and terrorism financing. This lack of specific focus broadens the potential for misuse of cryptocurrencies to be undetected, particularly in light of the steady migration by criminals to so-called privacy coins that encrypt wallets \u2014 like Monero \u2014 and in some cases also the transactions themselves.<\/p>\n

Related:<\/strong> <\/strong>CBDCs will lead to absolute government control<\/strong><\/p>\n

In June 2020, my own Counter Extremism Project (CEP) located a notorious pro-ISIS website requesting Monero (XMR) cryptocurrency donations \u201cbecause it offers more privacy and safety features than Bitcoin.\u201d Months later, a website that supports the National Socialist Order and spreads violent neo-Nazi propaganda requested donations via Monero, and a neo-Nazi chat group on Telegram posted a guide on how to purchase Monero to the dark web. The neo-Nazi accelerationist group The Base, too, has requested cryptocurrency donations in Monero to facilitate training and unspecified equipment.<\/p>\n

Though the U.S. has the most advanced capacity to track and seize cryptocurrencies used for criminal purposes, these and other privacy coins present technical hurdles that no country has yet fully overcome. Their encryption technology renders law enforcement largely blind to who holds privacy coins and to what end they are used, and its users know it. The availability of so-called decentralized wallets, shareware downloadable from the internet, outside of cryptocurrency exchanges also provides another layer of anonymity by removing a third party that is responsible for fulfilling customer identification obligations and due diligence procedures.<\/p>\n