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Cryptocurrency Called “Poor Form of Money” In Congressional Hearing

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Congressional hearing cryptocurrency

The U.S. Congress Subcommittee on Terrorism and Illicit Finance recently discussed a number of potential ways of terrorism financing using cryptocurrency. This came to light after a press release on September 7.

Cryptocurrency is a “Poor Form of Money For Jihadists”

With the aim of monitoring threats and the methods of financing terrorism, the hearing evaluated several methods of fund transfer employed by terrorists. These include formal methods such as the use of traditional financial institutions as well as semi-formal ways employing cryptocurrencies.

Congress was of the view that terrorist groups including Al-Qaeda and the Islamic State have been largely unsuccessful in raising funds through cryptocurrencies.

Experts such as Yaya Fanusie, FDD Center on Sanctions and Illicit Finance’s director of analysis have expressed their say. They believe that terrorists are at present operational in environments that are not friendly to the use of cryptocurrencies.

Fiat currency is still the most anonymous funding methods and is popular amongst such groups. He called crypto a “poor form of money for jihadists.”

He further added that cash is still their main asset when it comes to the purchase of goods. However, he also acknowledged how “there are multiple examples of terrorist cryptocurrency funding campaigns.”

Keeping Cryptocurrency Fundraising by Terrorists Under Control

Fanusie expressed the need for officials and government bodies to acquire more skills in the analysis of crypto transactions. This will help in successfully keeping the use of crypto fundraising by terrorists under control.

He expressed the need for “preparing now for terrorists’ increasing usage of cryptocurrencies.” With this, he believes, “the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”

He recommended that the government should particularly track the smaller crypto exchanges that trade the privacy coins rather than focussing on the major exchanges that already have strict KYC and AML policies in place.

LexisNexis, the risk management behemoth had earlier collaborated with Blockbid, the popular crypto exchange. They had introduced a security solution for exchanges that was called “Trade with Confidence”. Amongst the various use cases of this new measure was the intention of keeping terrorism financing under control.

A bill to this effect was also introduced by Rep. Ted Budd of the House Financial Services Committee in January this year. The bill aims to combat terrorism by rewarding those who supply vital information. Clues, that could lead to the identification of crypto-supported terrorism financing.

In a nutshell, it might seem too early to speculate on what the future holds for us.

However, it is important to evaluate all possible illicit activities that might creep into the world of digital currencies.

 

 

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