We live today “in the midst of an explosion of risk associated with fraud, money laundering, terrorist financing and privacy,” Finance Minister Janet Yellen said in February, calling cryptocurrencies a “terrorist financing tool.”

Yellen seemed to point to an important new turning point in the war on terrorism, and she asked several questions: Is cryptocurrency in the hands of terrorists a real and current danger to governments and society? If so, is it worth worrying about the cryptocurrency and blockchain industry?

Recent evidence suggests that the role of cryptocurrencies as contributing to terrorism worldwide is still relatively small. “Cryptocurrencies have been used in many terrorist financing cases, but they have not yet become the main tool for financing terrorism,” said Matthew Levitt, director of the Janet and Ellie Reinhardt Counter-Terrorism and Intelligence Program at the Washington Institute for Near East Policy. . Cointelegraph.

“Her [Yellen’s statement is really true – it’s a tool,” Gina Peters, an assistant professor of economics at the University of Chicago, told the Cointelegraph. But Elin also chose her words carefully. “She did not say that this is the main tool – she specifically said that it is a growth tool. This is also true, as cryptocurrencies grow, they will be used for more criminal activity. ”

Are there growing concerns about cryptocurrencies?
Dave Jeavans, CEO of CipherTrace, expressed dissatisfaction with the Secretary of State’s comments. “If executives like Janet Yellen take an alarming stance on crime-related cryptocurrencies, regulators could take drastic action to impose stricter rules on cryptocurrency transactions that may not be justified,” he told Cointelegraph, adding: “Such a measure as cryptocurrency. A ban in India would significantly impede mass adoption and innovation in space. ”

“I think she wanted to address this issue and bring it to the attention of the people,” Levitt said, adding that the abuse of cryptocurrency has been seriously given to her geopolitical interest in countries trying to evade Western political sanctions, such as Russia, Iran. or Venezuela. … From potential terrorists.

However, it does not take much money to finance a terrorist attack, so any help that Bitcoin (BTC) or other cryptocurrencies provide to terrorist groups that try to hide their sources of funding is still a problem. For this reason, Jesse Spiro, Chenales’ prime minister, told the Cointelegraph that Yellen did not overestimate the threat. However, “terrorist financing is an incredibly small fraction of cryptocurrency transactions.” In 2020, Chainalysis tracks only 37.35 bitcoins that went to terrorist financing, or “only 0.00324 percent of total illegal activity,” he said.

Has encryption become more important for terrorist groups?
In August 2020, the US Department of Justice seized cryptocurrency accounts for three terrorist financing operations in the Middle East. According to the Ministry of Justice, it was “the largest operation to seize digital currency accounts for terrorist organizations.” “It is a fact that jihadist groups led by ISIS and al-Qaeda have been using cryptocurrencies for years,” Stephen Stalinski, executive director of the Middle East Media Research Institute, told Cointelegraph. “After the fall of the ISIS caliphate, it soon became more important to them.”

In their daily online monitoring of jihadist groups, MEMRI groups and individuals discuss the use of different cryptocurrencies, “but recently this use has not reached the extreme proportions it could have been and still is possible,” Stalinsky said. “Any arrests and general news about the jihadists still using cryptocurrency have resulted in companies closing these and related accounts, and this seems to create a balance to limit the problem.”

A 2019 Rand study found that “no existing cryptocurrency can cover all the financial needs of terrorist organizations,” including anonymity, ease of use, security, reliability and acceptability, but cryptocurrencies like Bitcoin, especially those with improved portability. can be used attractively for fundraising, and some evidence suggests that terrorist organizations may use cryptocurrency to do so. It is very important that these groups can receive donor money outside the authorities.

Source: CoinTelegraph