bellingcat – The Evolution Of Bitcoin In Terrorist Financing

Terrorists have been tinkering with bitcoin as early as 2012 — but today, jihadi crowdfunding campaigns have been on the rise. Some think that since most of these campaigns haven’t raised significant funds, there isn’t much to worry about. I will explain why this is wrong.

Terrorists’ early attempts at using cryptocurrencies were filled with false starts and mistakes. However, terrorists are nothing if not tenacious, and through these mistakes, they’ve grown to have a highly sophisticated understanding of blockchain technology. This investigation outlines the evolution of terrorists’ public bitcoin funding campaigns starting from the beginning and ending with the innovative solutions various groups have cooked up to make the technology work in their favor. 


The Promise — And Reality — Of Bitcoin

When word of bitcoin began to spread, illicit actors’ ears perked up at the idea of an anonymous currency that could send money across international borders unregulated by any one central entity. However, the reality of using bitcoin for money laundering or terrorist financing was different.

In spite of the common misconceptions, bitcoin is not completely anonymous. Due to the nature of the blockchain, a public ledger of all bitcoin transactions, researchers and law enforcement can often discern users’ information using various blockchain analysis tools or, for law enforcement, through issuing subpoenas. Unlike with cold hard cash, using bitcoin basically puts transactions on a billboard for all to see, which is not ideal for criminals.

Bitcoin is not something that you can often use for everyday purchases; however, out of all cryptocurrencies, it’s by far the most popular and the easiest to exchange or cash out. Therefore, terrorists have an incentive to try to make crowdfunding with bitcoin work — as opposed to using another cryptocurrency that has fewer users and a more cumbersome exchange process.

That all being said, bitcoin is hardly…

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