The UN Is Deeply Concerned About Terrorist Funding Using Crypto

The UN Is Deeply Concerned About Terrorist Funding Using Crypto 

The United Nations (UN) is deeply concerned about terrorist funding using cryptocurrencies across the globe. According to a UN official, cash and hawala remain the "predominant methods of terror financing." However, "advanced" terror organizations are turning to cryptocurrencies.

Terrorist Groups Are Turning to Crypto

Terrorist groups that have been excluded from the "formal financial system" have turned to crypto to fund their heinous activities, according to Svetlana Martynova, the Countering Financing of Terrorism Coordinator at the United Nations (UN).

The UN official underlined during a speech at a "Special Session" run by the UN’s Counter-Terrorism Committee (CTC) in New Delhi and Mumbai on Oct. 28-29, which was focused on combating the use of "new and emerging technologies" for terrorist purposes.

Martynova said cash and hawala, a traditional system of transferring money in Arab countries and South Asia, have been the "predominant methods" of terror financing. "We know terrorists adapt to the evolution of conditions around them, and as technologies evolve, they adapt as well," she said.

Martynova noted that these technologies include cryptocurrencies, which have been used to "create opportunities for abuse," she said, adding:

"If they’re excluded from the formal financial system and they want to purchase or invest in something with anonymity, and they’re advanced enough for that, they’re likely to abuse cryptocurrencies."

UN Secretary-General Antonio Guterres also stated that while emerging technologies have an "unmatched potential to improve human conditions everywhere," the harm also expands far beyond that of terror financing.

"Terrorists and others posing hateful ideologies are abusing new and emerging technologies to spread disinformation, foment discord, recruit and radicalize, mobilize resources, and execute attacks."

Elaborating on the UN plans for addressing the issue at an international level, Martynova said the main challenge is to get nation-states on board with its regulation.

"We have very clear global standards from the Financial Action Task Force (FATF) and the resolutions of the UNSC," she said.

However, Martynova added that very few countries have started the work on regulation, and only a few of them are "successfully enforcing that regulation" to deter ill-intended non-state actors.

Some efforts are visible at the state level, such as the United States Department of the Treasury's sanctioning of crypto mixer Tornado Cash over money laundering and cybercrime concerns.

Several blockchain-based forensic firms such as Chainalysis and Elliptic have in recent years been able to track down cybercriminals and report their activities to governments, which has helped in erasing the myth that cryptocurrency is a criminal’s haven.