US Congressional Committee Concludes That Terrorists Have Little Use for Crypto

For a long time, various countries have imposed strict regulations on crypto and maintained a minute watch on the tradings, for fear of funding of terrorism via crypto. However, the recent news coming in from the States hints at something contrary to this belief.

On September 7, the U.S. Congress Subcommittee on Terrorism and Illicit Finance sat down for a meeting where they discussed the various methods of possibly funding terrorism with cryptocurrency. A press release was made public by the U.S. House of Representatives Financial Services Committee, titled ‘Examining Terrorist Groups and Their Means of Financing Illicit Activity’

The release stated three key takeaways from the meeting and one of them was combating the financing of terrorism was at the centre of combating terrorism itself. All the possible ways of transferring funds by terrorists were considered, including traditional financial institutions like banks and other methods, like the hawala exchange system, as well as cryptocurrencies. The Interpol defines hawala as “money transfer without money movement” since there is usually no paper trail and it is a trust based system.

The meeting concluded that various terror organisation like al-Qaeda and the Islamic State, have attempted to raise funds through crypto but have not been largely successful. One of the key reasons was that most operating areas of terrorists are in such places, where crypto is still not operable and hence can’t be used on ground for buying amenities. There is no substitute for cash on ground, as stated by Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, who termed crypto as a “poor form of money for jihadists.”

Fanusie added:

“By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”