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

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

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Ben Kothe / BuzzFeed News; Getty Images (3)

Who to promote The self-proclaimed Azym Abdullah didn’t need to spend too much money to build a website for ISIS that could play terrible beheading videos. What he needs is confidentiality, so in 2014, he reportedly 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 requires donations from visitors 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 the 2017 US Treasury Department’s intelligence assessment, which was received by BuzzFeed News as part of a series of documents including internal emails and reports on cryptocurrencies . The intelligence assessment also revealed evidence of nine other incidents in which terrorist supporters 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 global transfer) Can be used for evil purposes.

For example, in 2016, analysts from the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury issued an alert 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 was one of the documents received by BuzzFeed News and found that “out of the 30 largest hybrid services, none have been 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 engaged in illegal narcotics, fraud, counterfeiting, and child exploitation, 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 the Treasury Department’s concerns about encryption technology for at least 10 years. FinCEN is now trying Change the rules Therefore, any company engaged in the cryptocurrency business 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

The Office of the Financial Crime Enforcement Network under 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 stop 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 discovered that they can use it to raise donations to raise funds for operations.Ministry of Justice last August Announce An investigation conducted in cooperation with the U.S. Department of the Treasury has seized millions of dollars as part of “the largest seizure of cryptocurrency accounts by terrorist organizations in history.”

one of indictment Describes how Al Qaeda and its affiliates conduct money laundering activities, which collect donations in encrypted currency through social media accounts. They then used the network to make donations to “further achieve terrorist goals.” One of the Al Qaeda-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. May 25, 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 stop 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 in 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 themselves and let them know that they are about to receive illegal funds. .. “

Currently, in the ever-evolving market characterized by secrecy, there are thousands of different virtual currencies trading. Usually, cryptocurrency owners obtain these funds on exchanges and store them in a virtual wallet whose address is 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.

However, some exchanges are opposing FinCEN’s proposal for stricter regulations, which are more onerous 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 heavy work and may infringe customers 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 governments to obtain large amounts of sensitive financial data.” ●

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