Terrorists Fund Their Atrocities With Crypto: UN Officials

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

The UN official made the comments during a speech at a “special meeting” run by the UN Counter-Terrorism Committee (CTC) in New Delhi and Mumbai on 28-29. October – which was focused on combating the use of “new and emerging technologies” for terrorist purposes.

Martynova said that while cash and “hawala” – a traditional system of transferring money in Arab countries and South Asia – have been the “predominant methods” of terrorist financing, “we know terrorists adapt to the development of the conditions around them and as technologies evolve they also adapt,” she said.

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

“If they are excluded from the formal economic system and they want to buy or invest in something with anonymity, and they are advanced for that, they are likely to abuse cryptocurrencies.”

UN Secretary-General Antonio Guterres also stated that while emerging technologies have “unparalleled potential to improve human conditions everywhere”, the damage also extends far beyond terrorist financing:

“Terrorists and others who espouse hateful ideologies misuse new and emerging technologies to spread disinformation, create discord, recruit and radicalize, mobilize resources and carry out attacks.”

As for how the UN plans to handle the issue at international level, Martynova said that the main challenge is to get the nation states involved in the regulation.

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

Martynova added, however, that very few countries have begun work on regulation, and even fewer have been “successful in enforcing that regulation” to deter bad non-state actors.

Related: Terrorists still raise money through crypto, but the impact is limited

Some efforts are being made at the state level, with the US Treasury Department notably sanctioning crypto mixer Tornado Cash due to concerns about money laundering and cybercrime.

A number of blockchain-based forensics firms such as Chainalysis and Elliptic have also emerged in recent years to track down cybercriminals and report their activities to authorities – helping to dispel the myth that cryptocurrency is a criminal safe haven.