Cryptocurrencies are becoming increasingly popular as a method to fund terrorists, according to the New York Times.
Citing a research paper written by Steven Stalinsky, the executive director of the Middle East Media Research Institute, a nonprofit that tracks and translates communication from terrorist groups, the article suggests that crypto fundraising for terrorist organizations is becoming more common, as groups look for ways to raise cash that avoid banks and other intermediaries.
The Times also reports that Hamas, a Palestinian fundamentalist group based in the Gaza strip has set up a website to collect Bitcoin donations. The website, which has been active for months, contains a single video, slickly animated and translated into 7 languages, appealing for Bitcoin donations.
Hamas has two distinct wings, the Dawah–its civilian arm–and the Izz ad-Din al-Qassam Brigade–its military arm–the latter is listed as a terrorist organization by the UK, Australia, and New Zealand. The US however, does not make that distinction and regards Hamas in its entirety as a terrorist organization. The website in question has been set up by the militant wing, known colloquially as the Qassam Brigades.
“Bitcoin is a currency that cannot be tracked,” proclaims a video on the website, even though blockchain analytics firms exist to do just that.
The video invites donors to send money to a Bitcoin wallet. Alternatively, they can go to a money exchange office and have money deposited to the wallet in question but, if they do so, they are told not to mention that the wallet is owned by a terrorist organization.
Qassam Brigades does not say how the donations will be used. At the time of writing, they have not responded to questions by Decrypt.
The recent funding drive is part of what terrorist scholars call “outbidding.” This is where terrorist organizations compete to win the support of wavering moderates or to recruit individuals. Recent examples of outbidding include suicide bombing.
Yaya Fanusie, a consultant on crypto and terrorists, told The Times, “You are going to see more of this.”
While Bitcoin’s early years saw it become synonymous with online drug trafficking—mostly thanks to Silk Road–the project has managed to shake its seedier history and is seen as an on-ramp for institutional investors into crypto. However, new revelations about its connection to funding terrorist activity could put a blemish on the cryptocurrency’s reputation.