A new report confirms that that terrorist activities continue to be backed by cash rather than cryptocurrencies, which don’t afford such groups the anonymity they seek.
It is a fact that has been known for some time, despite many government departments in jurisdictions around the world citing cryptocurrency links to terrorism, a connection well disproven over time. A 72-page long report published by Europol late last year confirmed conventional banking as the primary source of terrorist funding such as the recent attacks on European cities.
Europol, based in The Hague, the Netherlands, supports the 28 EU Member States in their fight against terrorism, cybercrime and other serious and organized forms of crime. They also work with many non-EU partner states and international organizations.
Now, a newly release Rand Corporation report reconfirms that cryptocurrency is ineffective as a source of funding for terrorist groups. Cash is seen as being far more suited to the transfer of large sums for such activities, mainly due to the increasing degree of legalization and regulation surrounding the cryptocurrency space, which is seen by many from within the industry as a good thing.
The latest report, eclipsing Europol’s 2018 report by 27 pages, focuses primarily on the receipt, management, and spending of funds for terrorist activity. The report maintains that the only one of these areas in which cryptocurrency might have some effectiveness in the first, as receiving funds has been made simple by using digital assets due to its global nature and ease of distribution.
This is counteracted by the fact large sums cannot easily be managed and certainly hit problems when it comes to spending cryptocurrency anonymously due to the current industry infrastructure. The report maintains:
“We see little current evidence of the adoption of cryptocurrencies by terrorist organizations or the motivation to do so, but that very well might change as countermeasures shut off funding and as the cryptocurrency technology changes.”
The report suggests the terrorist needs are not supported by current cryptocurrency systems such as affording the anonymity to buy arms, purchase property and pay for propaganda. These key areas vitally important to terrorist cells require hard cash.
However, the Rand report does add one note of concern for the future suggesting that situation might change with the potential emergence of a single cryptocurrency “that provides widespread adoption, better anonymity, improved security, and that is subject to lax or inconsistent regulation”.
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