Report by Muhammad Safeet Ahmed
Terrorism does not survive on ideology and propaganda alone, it demands somewhat more: to bleed money, thriving on financial aid in every aspect of it all, financing operatives, weaponisation, producing propaganda, and maintaining networks.
Finance is the backbone of every terrorist operation.
For the past decades, financing terrorism has deeply relied on the traditional money laundering methods, such as Hawala networks, cash-smuggling, shell companies and unregulated NGOs.
Since the dawn of the digital revolution, terrorism has also revolutionised itself, from cyber-warfare to crypto-currency, terrorism is utilising everything at its disposal.
Cryptocurrencies such as Bitcoin, Monero, Zcash, etc, offer a level of pseudonymity that orthodox financial systems do not match. Digital currencies enable users to conduct transactions while maintaining secrecy and not revealing their identity, making it a “mission impossible” for authorities to trace the source of such funding.
Anonymity is pleasing towards their line of work.
In 2022, the UN stated that around 5% of the world’s terror attacks are now funded by crypto without any involvement of fiat money. Soon after, Bloomberg reported that the percentage will move up to 20 in the following year (2023) as the expansion of digitised terrorism is happening at an accelerated pace.
In the same year, CTD, the frontline counter-terrorism agency of Pakistan, arrested a university student, accused of operating a digital wallet (GoFundMe) facilitating the channelisation of digital funds for ISIS. According to sources, he was a final-year student of NED University, Karachi’s top engineering institute.
Confronting this challenge, Pakistan is not alone. Authorities across the globe are dealing with and uncovering similar patterns of abuse. Interpol published a report, “The Global Counter-Terrorism Strategy (2016–2020),” which represents INTERPOL’s commitment to building a safer world through cooperative, intelligent, and adaptive counter-terrorism efforts. By focusing on the identification of terrorists, restricting their movements, countering their use of cyberspace, denying them weapons and materials, and cutting off their funding sources, the strategy addresses the full lifecycle of terrorist operations.
Through regional focus, global reach, robust policing tools, and a strong partnership network, INTERPOL aims to empower its member countries to anticipate, prevent, and neutralise terrorist threats. As terrorism continues to evolve, so too must the collective response—innovative, agile, and united.
On November 3, 2022, David L. Anderson, the Attorney of the US Department of Justice and special agent in charge of the Washington, DC, field office, traced and dismantled a network responsible for the illegal possession and regulation of bitcoins worth 1 billion US dollars.
Sourcing, the US Department of Justice, an individual hacker named “Individual X” managed to exfiltrate bitcoins worth 1 billion US dollars, from the most notorious darkweb site “Silk Route.” It was confirmed that “Individual X” was dealing with several terrorist outfits, notably Al-Qaeda and ISIS, facilitating through his crypto empire for financial advantages.
Cryptocurrencies are not innately illicit; their foundational technologies, however, present significant potential for financial exploitation, allowing individuals to exploit loopholes with ease.
