Crypto Use Is A 'Fringe Activity' Among Terrorists, Says Think Tank

A new report from a Washington, D.C. think tank presented last week argued that cryptocurrencies aren't well-suited for terrorist financing - while also highlighting the limited success terrorist groups have had attempting to raise funds with the technology.

Noting that "Cryptocurrencies and blockchain technology are not innately illicit and should not be feared," the report provides an overview of several cases in which groups used cryptocurrency to raise funds.

These include pro-Islamic State websites, a group based in Gaza, a group allegedly connected with Al-Qaeda, and a contractor training ISIS fighters.

Still, the technology isn't well suited for those who are raising funds in war-torn areas, writing at one point that "Operating financially with digital currencies remains a fringe activity both among the general public and within the population of global jihadists."

"The good news is that most terrorists, particularly those operating on jihadist battlefields, inhabit environments that are not currently conducive to cryptocurrency use," the FDD notes elsewhere in the report.

The FDD also cites reports from 2017 of a fundraising campaign led by a consortium of jihadists in the Gaza Strip called the Mujahideen Shura Council, which was deemed a foreign terrorist organization by the State Department.

Notably, the FDD contended that deposits were made via the now-defunct cryptocurrency exchange BTC-e. Another group that tried to attract bitcoin donations called itself al-Sadaqa and claimed to be raising funds for fighters in Syria.

According to the report, the group was connected to Al-Qaeda and promoted its propagandist content.

"Therefore, all agencies with counter-threat financing groups should have dedicated analysts who specialize in blockchain analysis."

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