Over the past few years, there have been rising concerns about the use of cryptocurrencies for illegal activities. Although the majority of these are overestimated, there is no denying that there are some bad actors trying to take advantage of the technology’s decentralized nature.
TRM Labs, a blockchain intelligence firm, recently published a report on the increasing use of crypto assets by terror organizations.
ISIS Allies Used Crypto To Raise Funds: TRM Labs
TRM Labs has unveiled its findings regarding cryptocurrency fundraising by ISIS and its supporters across Asia. In a report dated July 21, 2023, the blockchain intelligence company revealed the details of its investigation on the use of crypto assets in the world of terrorism.
According to TRM Labs, most of the transactions by the different pro-ISIS networks were carried out using the Tether stablecoin (USDT) on the Tron network.
The intelligence firm mentioned a case in which various pro-ISIS groups used cryptocurrency to recruit fighters in Tajikistan for an ISIS affiliate. One of the fundraising campaigns reportedly amassed $2 million worth of USDT through a crypto exchange address in 2022.
Furthermore, TRM Labs claims that the personality, Shamil Hukumatov, behind this campaign was arrested by Turkish Authorities in June 2023. This operation’s success reportedly hinged on the exchange’s ability to identify the account operator through its know-your-customer (KYC) measures.
In the report, TRM Labs cited other cases where cryptocurrency and crypto exchanges were used to finance terrorism-related activities in Indonesia, Pakistan, and Afghanistan.
The blockchain intelligence company mentioned the on-chain links of these cases to pro-ISIS fundraising campaigns in Syria. TRM Labs claims that the West Asian country remains a major center of crypto use by ISIS and its supporters.
What’s The Position Of Crypto Exchanges On Terrorism?
In its Tajikistan study, TRM Labs noted that a crypto exchange alerted the local authorities the moment it identified the person operating the fundraising account. Most crypto companies and exchanges have always taken a strong stance against terrorism and related activities.
In May, Binance, the largest cryptocurrency exchange, reiterated its commitment to upholding its anti-terrorism stance. This was in response to a Reuters article, which raised questions about the exchange’s compliance policies for preventing and tackling crypto-based funding of terrorism.
In a robust defense, Binance stated that it takes the topic of anti-terrorism “very seriously” and has done more to keep bad actors off its platform than any financial institution.
A part of the response read:
Binance currently has more than 750 compliance-supporting employees, many with prior law enforcement and regulatory agency backgrounds. So far this year, we have already helped law enforcement to freeze/seize more $1 billion. Almost half of our compliance team are involved in sanctions control work such as anti-money laundering, name screening, Know Your Customer (KYC) onboarding and on-chain monitoring.
Aside from Binance, Coinbase – another prominent crypto exchange – has always publicly disclosed its “counter-terrorism” position. In 2021, the company published a report on the “use of cryptocurrency in terrorist financing” and what it is doing to curb it.
Crypto total market cap at $1.164 trillion on the daily timeframe | Source: TOTAL chart from TradingView
