The Subcommittee on Terrorism and Illicit Finance within the U.S. Congress recently explored the relationship that terrorism has with finance.
According to a press release from the Financial Services Committee, the council met in order to investigate the ways in which terrorist groups create and transfer funds. The Subcommittee Chairman Steve Pearce stated that extremist organizations founded on terror “cannot function without financial resources to organize and carry out their violent actions.”
Pearce gave reason to their reason for meeting was with the intention to “understand the nature of these threats that are currently facing the nation and the world, in order to do all they can to put an end to these illicit acts”.
The Congress further discussed on the matter and Yaya Fanusie, the director of analysis for the Foundation For Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, stated that “[cold] hard cash is still king” and explained that cryptocurrency is “a poor form of money for jihadists because they usually need to purchase goods with cash often in areas with unreliable technology infrastructure”.
Fanusie also stated that “[terrorist] organizations have a long history of exploiting banks and other traditional financial institutions, as well as semi-formal means of transferring funds, such as the hawala exchange system. But emerging financial technologies offer new channels to raise and move funds”.
The FDD also released an announcement on Twitter that pointed out that digital currencies are not attractive to jihadist terrorist groups.
.@SignCurve to @FinancialCmte: “The good news is that most terrorists, particularly those operating on jihadist battlefields, inhabit environments not currently conducive to cryptocurrency use. Still there are multiple examples of terrorist cryptocurrency funding campaigns.”
— FDD (@FDD) September 7, 2018
Despite the good news, Fanusie warned that cryptocurrency usage for illicit activity might increase as more alternative coins enter the market through smaller trading exchanges. He suggested that this stems from the US regulatory authorities clamping down on cryptocurrencies.