For extreme groups, the anonymity veil that is sometimes praised as an advantage from cryptocurrencies has backfired shockingly.
According to a fresh analysis by blockchain forensics company Chainalysis, white supremacist group Nordic Resistance Movement (NRM), classified as a terrorist group by the US Treasury, has been funding its operations almost a decade using cryptocurrency donations.
Traces Of Dirty Money On The Blockchain
Based on Chainalysis’ research, the NRM, founded in Sweden in 1997, aggressively sought bitcoin contributions from at least 2015. This strategy most likely developed from penalties placed on the group, therefore restricting their access to conventional bank accounts.
The study shows how the NRM attracted almost $90,000 worth of crypto donations among several well-known cryptocurrencies including Bitcoin, Ethereum, and Litecoin.
The most worrisome element is where these donations come from. Chainalysis found transactions coming from a mining pool as well as well-known centralised bitcoin exchangers. This begs grave issues regarding the efficiency of the anti-money laundering (AML) systems used by various systems.
NRM activity on public exchanges draws attention to a possible flaw in the way these platforms search for illegal activity. Although several exchanges have put KYC (Know Your Customer) policies into place, it seems these might not be strong enough to identify all efforts at extreme funding.
Crypto Regulation: Closing The Financing Faucet
The NRM case sparks once more the discussion about cryptocurrency control. Although supporters of cryptocurrencies praise their distributed character and financial freedom, this event highlights how easily they might be used by people working on the margins.
Now under pressure to identify answers that stop extremist groups from using cryptocurrencies as a financial lifeline are governments and regulating authorities.
Some analysts claim that this scenario emphasises the need of closer cooperation between law enforcement and cryptocurrency exchanges. Cutting off money for these groups depends on information exchange and coordinated attempts to find dubious activities on the blockchain.
The Future Of Crypto And Combating Extremism
The NRM instance reminds us clearly the changing strategies used by extreme groups. Law enforcement and regulatory agencies have to change with the always changing terrain of internet fundraising.
There is a difficulty related to the anonymity connected with various cryptocurrencies. But improvements in blockchain analysis tools are making it harder and harder for rogue players to go undetectable.Ensuring crypto does not turn into a refuge for hate depends on industry and government working together.
The battle against extreme finance calls for a multifarious strategy. Although strong KYC rules and information exchange are vital, encouraging openness inside the crypto ecosystem is as vital.
Featured image from The Media Lin, chart from TradingView
