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While delivering a speech to the Annual International Conference on Counterterrorism, a U.S. Treasury official reaffirmed the U.S. government stand on crypto. The Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker stated that this new class of digital assets could be the next frontier in funding terrorist groups.
“While most terrorist groups still primarily rely on the traditional financial system and cash to transfer funds, without the appropriate strong safeguards cryptocurrencies could become the next frontier.”
Citing an incident in February relating to the Hamas terrorist group as an example, Under Secretary Sigal Mandelker stated that cryptocurrency gives these terrorist groups an easy and safe window to get their hands on the funding necessary to perpetrate their evil acts.
The Palestinian terrorist group, Hamas, currently holds multiple Bitcoin addresses, making it easy for them to receive money from any part of the world. The terrorist group reportedly raised up to $5,000 in crypto, used to finance an attack.
Supporting this claim, the New York Times recently reported that Hamas has developed an “increasingly sophisticated campaign” aimed at raising funds through the world largest cryptocurrency, Bitcoin(BTC)trade. In a bid to wave off government attention, Hamas constantly creates new Bitcoin addresses, giving one to each new member who wishes to fund the group. This makes it harder to track.
The U.S. Treasury official also claimed that analysis from FinCEN suggests that remittance payments to these terrorist groups go as high as $600 per transaction.
Under Secretary Mandelker added that if the trend is left unchecked, cryptocurrencies could become a huge threat to national security. Therefore, she reassured her audience that the U.S. Treasury department is poised on working closely with the government to ensure that every fintech and crypto network comply with government regulation, and that they would make certain that “non-compliant networks and fintechs do not survive.”
Not All Agree that Crypto Is a Major Risk
As scary as these facts may seem, some people are of the opinion that such fears are totally overblown. Coin Center, a crypto advocacy group, has alleged time and time again that the use of digital currencies by terrorist groups is not a major risk as it is just an exaggeration.
Again, most terrorist groups haven’t had much luck with virtual assets, since they are typically situated in remote areas, where technology is a light years far from. How could they possibly send or receive crypto with no computers or smart mobile devices, from which they often stay away?
This coupled with the fact that these terrorist groups are beginning to learn that cryptocurrency isn’t as anonymous as it was paraded initially, dissuade terrorists even more.
So, crypto might not necessarily be the ‘bad guy’ here or at least not an obvious complicit to bad guys.