Chainalysis Identifies Fine Tuning of Crypto Funding Methods by Terrorists
A survey by Chainalysis arrived at a conclusion that terrorists are fine tuning their funding methods using cryptocurrencies.
The blockchain researchers have identified Izz ad-Din al-Qassam Brigades (AQB), Hamas’s military arm and noted terrorist organization, as the first sure case of cryptocurrency use by terrorists for funding their unlawful activities.
AQB utilized a website to create a fresh Bitcoin address for every donor to send funds. The website also included a video explaining customers the way to donate crypto with utmost anonymity.
In comparison to previous programs run by the organization to raise funds, AQB raised almost the same amount of money in half the time. Additionally, the website also received more donors.
It is not the first time cryptos are linked to illegal activities, including hate crimes and Ponzi schemes. Chainalysis, in another research, traced $2.80 billion in Bitcoin from criminal groups to exchanges. More than 50% i.e. $1.40 billion in Bitcoin was moved via major exchanges Binance and Huobi.
Crypto assisted unlawful activity has already drawn attention of regulators and government officials who prefer better tracking of cryptocurrencies. In 2019, while rendering a speech at an event conducted by the Financial Action Task Force (FATF), the US Treasury Secretary Steve Mnuchin, praised international regulatory guidelines that would battle crypto based offences.
“The FATF will make sure that virtual asset service providers do not operate in the dark shadows […] This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes…”
FATF, which includes 200 member nations, including the US, advocates steps to fight financial crimes. The organization has now demanded cryptocurrency exchanges to find out additional information about clients and their transactions.
Additional info may assist in identifying money laundering and terrorism funding through exchanges that primarily lack the supervision abilities required to fight the growing problem.
In a statement to Chainalysis, Binance CCO Samuel Lin said,
“Binance is committed to cleaning up financial crime in crypto and improving the health of our industry. We will continue to improve on our proprietary KYC and AML technology, as well as the third-party tools […] One of our core values at Binance is to protect our users…”
Notably, in the final quarter of 2019, Binance, one of the biggest cryptocurrency exchanges, surpassed $1 billion in profits.