terrorism - Pwim.Net

Indian Minister Reveals Crypto Regulatory Measures to Tame Terrorism

Terrorism has emerged to be one of the biggest predicaments across the globe. India is, therefore, not oblivious to this reality as it has revealed stringent measures intended at curbing this menace.

On Nov 8, at the “No Money for Terror” conference being held in Melbourne, Australia, G. Kishan Reddy, India’s Union Minister of State (MoS) for Home Affairs disclosed that the nation would incorporate the standards of the Paris-based Financial Action Task Force (FATF) to deter terrorism.

Expressly, FATF is an anti-terror finance watchdog that was established in 1989 to combat money laundering through liberal policies. It will, therefore, be used in taming terrorism by cutting off funding sources, especially cryptocurrencies.

Reddy affirmed: “Virtual assets, especially cryptocurrencies, offer certain unique advantages to criminals because of their pseudonymous nature, encryption, global reach, and low-cost.”

He also added: “The government of India is fully committed to implementing FATF standards and establishing effective Anti-Money Laundering and Countering Financing of Terrorism regimes to dismantle and disrupt the terror-financing networks.”

India has been at the forefront of unraveling terrorist activities in the cyber world. Reddy stipulated that investigations had shown that the Islamic State, a terrorist organization, had utilized the Dark Web and encrypted platforms to recruit and radicalize members.

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ISIS Is Not Hoarding $300M in Bitcoin War-Chest, Reports Chainalysis

Over the past week, the comments of a counter-terrorism think tank Director have indicated that ISIS has been using cryptocurrency platforms to conceal donations and bypass financial security measures and could be hoarding close to 300 million in Bitcoin.

The think tank expert initially made the revelation after identifying an increase in advertising for BTC donations. However, a recent report from Chainalysis suggests that there is no evidence of ISIS’s $300 million BTC war-chest and they are not impressed with the mainstream media’s conflation of the Director’s comments.

The articles reporting the supposed war-chest took their lead from the comments of Hans-Jakob Schindler, Director of the CEP (the Counter Extremism Project, a specialist think tank tracking the trend of terrorism financing), who revealed that since 2017, the authorities have been searching for the terror group’s mission war chest and it is feared that it may have been converted into cryptocurrency to be used at a later date.

Schindler said, “I’m wondering if from 2017-2020 there has been $300M that we have not found and that’s why I’m thinking this might have been one of the ways it might have been used.”

The thought of a notorious extremist group like ISIS being funded by anonymous crypto and Bitcoin fits right into many people’s conceptions of the main use for digital assets: to fund terror and buy contraband.

However, as Chainalysis has revealed in a recent report, there just is no evidence beyond Schindler’s guesstimation and there is no evidence among his think tanks research either to make the $300 million BTC war chest claim. In fact, there is nothing really to suggest that ISIS has any bitcoin at all.

Chainalysis Busts ISIS BTC War-Chest Myth

As mainstream media headlines blew up with the sensation ISIS crypto-fund story, Chainalysis decided to publish a fact-checking blog on May 20, accusing the media of sensationalizing out of context comments.

The report reads, “This week, stories circulated that Hans-Jakob Schindler, director of the think tank the Counter Extremism Project, said that authorities have searched for ISIS’s missing war chest since 2017 and that he is wondering if the $300 million has not been found because cryptocurrency “might have been one of the ways it might have been used… This would be an ideal storage mechanism until it is needed. If done right, it would be unfindable and unseizable for most governments.”

According to the analysis firm, most of the terror financing ever conducted via bitcoin has never even raised more than $10,000.

Chainalysis asserts, “Schindler’s theory is highly unlikely,” further explaining that if ISIS had funneled oil proceeds into Bitcoin, “trading volume of regional exchanges and money service businesses would have reflected this flow of funds.”

Furthermore, contrary to popular belief, cryptocurrency and Bitcoin are not necessarily the ideal storage mechanisms for illicit funds. While digital assets have a reputation for being untraceable, in comparison to cash they are “inherently transparent”, every transaction is recorded and publicly visible in the decentralized ledger.

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DOJ Extradites Bitcoin Thief From Cyprus Along With Hezbollah Terrorist

The US Department of Justice has extradited two criminals from Cyprus—one with known connections to terrorism and the other on suspicion of stealing thousands in Bitcoin.

Two accused criminals have been extradited from Cyprus by the DOJ, one for stealing thousands of dollars worth of Bitcoin, and the other is a money launderer connected to the terrorist organization Hezbollah.

According to the DOJ, a Cypriot national named Joshua Polloso Epifaniou stands accused of conspiracy to commit wire fraud, identity theft, and extortion. The DOJ alleges that Epifanou, along with his co-conspirators, targeted a Californian online game publisher, a hardware company in New York, an online sports website and an employment website in Virginia—to steal users personal information between 2014 and 2016. Epifaniou allegedly gained access to these networks and managed to defraud them of over $55,000 dollars in Bitcoin.

Per the report, “After obtaining the personal identifying information, Epifaniou allegedly used proxy servers located in foreign countries to log into online email accounts and send messages to the victim websites threatening to leak the sensitive data unless a ransom was paid. He is alleged to have defrauded the entities of $56,850 in bitcoin, and two victims incurred losses of over $530,000 from remediation costs associated with the incident.”

In addition, Epifaniou has been accused of organizing a brute force attack on Ripoff Report in 2016. A brute force attack is a trial-and-error method used to obtain information, such as a user password or personal identification number. Epifaniou allegedly used the attack to successfully override Ripoff Report’s login and password protection to access its database through an existing account for a ROR employee. He then allegedly held the database ransom for $90,000.

The other man extradited from Cyprus is Ghassan Diab who has been identified by the DOJ as a member of Hezbollah. The Lebanese national, Diab is suspected of money laundering over $100,000 and conspiring to launder a further $100,000 as well as standing accused of the unlicensed transmission of currency.

The news comes just days after another criminal complaint was filed on July 9 by the DOJ charging a New York resident—Douglas Jae Woo Kim, 27 years old, with wire fraud in where he allegedly conned three investors out of over $4.5 million of Ethereum and Bitcoin.

US Government Seize Bitcoin Terrorism Funding for Islamic State and Al-Qaeda

The US Justice Department has revealed that it has seized Bitcoin and cryptocurrency worth millions of dollars intended to fund the activities of terror groups like the military arm of Hamas, the Islamic State, and Al-Qaeda. This breakthrough is the largest clampdown on online terrorist fundraising, according to The Washington Post.

300 cryptocurrency accounts scrutinized

Apart from the captured funds, the US officials also disclosed that they had attained court orders to get hold of 300 cryptocurrency accounts, four Facebook pages, and four websites linked to the alleged terror fundraising.

They also noted that Al-Qaeda groups mainly in Syria were to be financed using laundered Bitcoin. The funding organizations in question solicited Bitcoin donations using social media platforms like Telegram.

According to the US government’s court filing, the appeal for donations was at times disguised as charity work if the message didn’t sink in that the money was to be used to purchase weapons.

Quest for Bitcoin donations

The US authorities noted that they thoroughly investigated the military wing of Hamas called Al-Qassam Brigades after it posted a request for Bitcoin donations on its social media page as they were untraceable and could be channeled for violent causes. They were able to lay hold of 150 accounts linked to this fundraising effort.

Steven T. Mnuchin, the Treasury Secretary, noted:

“Terrorist networks have adapted to technology, conducting complex financial transactions in the digital world, including through cryptocurrencies.”

In another case, Murat Cakar was charged for being an orchestrator of the Islamic State. He was the mastermind of a coronavirus-related scam, which coerced victims that it was selling protective masks.

In May, blockchain analysis company Chainalysis indicated that ISIS was not hoarding $300 million Bitcoin war-chest. This revelation came in the wake of allegations that this terror group using crypto platforms to bypass financial security measures and conceal donations.

Democrats Request Trump Administration Briefing on Enormous Seizure of Cryptocurrency Terrorism Funding

House Democrats Reps. Josh Gottheimer (D-N.J.) and Emanuel Cleaver (D-Mo.) more details from the White House on the recent seizure of cryptocurrency funding that was bound for Hamas, al-Qaeda and Islamic State terrorist groups.

According to a report from The Hill on Aug 25, Cleaver, who is the chairman of the House Financial Services Subcommittee on National Security, International Development, and Monetary Policy, and Gottheimer, a member of the subcommittee—have requested that Treasury Secretary Steven Mnuchin and Attorney General William Barr offer a briefing to the subcommittee on the seizure operation.

Cleaver and Gottheimer wrote in their request to the Trump Administration:

“It is vital that Members of the Subcommittee on National Security, International Development and Monetary Policy receive a briefing, at the appropriate classification level, on this action, the largest ever seizure of online terrorist financing, from the Department of Justice, the Department of the Treasury on this investigation.”

Gottheimer was part of the House Bipartisan group that, in 2019, pressured Twitter to remove several accounts tied to Hamas and Hezbollah, which Twitter did in the end.

On Tuesday Gottheimer said, “foreign terrorist organizations, including ISIS and al Qaeda, are constantly evolving and using tactics to threaten our way of life and we must continue to stay one step ahead.”

Terrorist Bitcoin and Crypto Seizure

According to the US Justice Department, two weeks ago millions of dollars in Bitcoin and cryptocurrency that was intended to fund the activities of terror groups like the military arm of Hamas, the Islamic State, and Al-Qaeda were seized by law enforcement. This breakthrough is the largest clampdown on online crypto terrorist fundraising in history.

According to the US government’s court filing, the appeal for donations was at times disguised as charity work, including scams for COVID-19 relief work.

French Police Arrest 29 People for Financing Syrian Islamist Terrorists Using Bitcoin Coupons

The French police have apprehended 29 individuals across the nation suspected of funding Islamist extremists in Syria using cryptocurrencies. French authorities allege that the arrested individuals are involved in a complex terrorism-fiancing scheme using coupons to finance terror members in Syria as the payments are credited to the extremists’ Bitcoin accounts.

Purchasing cryptocurrency coupons

The terror network is thought to have been active since 2019 as the 29 people, aged 22 to 66, often purchased crypto coupons valued at between 10 and 150 euros ($11 to $175) at different tobacco shops called Tabacs across France.

Upon making the payment, the references were transmitted via secure messaging to Syria-based jihadists who would then credit them to Bitcoin platforms.

The police noted:

“Constant surveillance of these networks prompted terrorist organizations to seek more opacity by using cryptocurrencies such as Bitcoin.”

The police revealed that the network’s ringleaders were 25-year old Walid F and Mesut S, both jihadists located in northeastern Syria. They are suspected of belonging to Hayat Tahrir Al-Sham, an affiliate of al-Qaeda. In 2016, the two were slapped with a 10-year sentence in absentia and are under an international arrest warrant.

Unraveling terror financing

Tracfin, a team within the French Economy Ministry, mandated with tracing terror financing, money laundering, and fiscal fraud, uncovered the complex terrorism-financing network.

Two of the 29 accomplices are thought to be the masterminds of offering logistical aid to the terror system, which is suspected of supplying hundreds of thousands of euros whose beneficiaries have been al-Qaeda members.

In August, the US Justice Department revealed that it had seized Bitcoin and cryptocurrency worth millions of dollars intended to fund the activities of terror groups like the military arm of Hamas, the Islamic State, and Al-Qaeda. This breakthrough was the largest clampdown on online terrorist fundraising.

Janet Yellen says Crypto Terrorist Financing is a Concern Following Attacks on US Capitol

Former Federal Reserve Chair Janet Yellen highlighted the “growing concern” of crypto being leveraged to finance terror just weeks after the US Capitol came under attack from domestic terrorists.

President-elect Joe Biden has named former Fed Chair Janet Yellen to lead the United States Treasury Department when his administration formally takes office, which is expected to occur later today.

Yellen said that the United States needs to examine how it can curtail the use of crypto for illicit financing.

The former Fed Chair’s remarks come just two weeks after a mob of domestic terrorists stormed the US Capitol Hill building allegedly in an attempt to overturn the defeat of President Donald Trump in the recently concluded presidential elections.

While the mob allegedly stormed the Capitol building in an attempt to disrupt the Electoral college vote count by a joint session of Congress and prevent the formalization of president-elect Joe Biden’s election victory—new evidence has come to light indicating these violent protestors had been paid in Bitcoin.

Janet Yellen Concern Over Crypto Illicit Financing

The incoming Secretary of the Treasury, Yellen made the comments during her Senate confirmation hearing in response to a question from Sen. Maggie Hassan (D-NH) who asked about the potential for cryptocurrency to be leveraged in financing criminal and terrorist activities.

Yellen answered:

“The technologies to accomplish this change over time and we need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern.”

The former Fed Chair added:

“I think many [cryptocurrencies] are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels.”

Attacks on the Capitol Paid in BTC

Investigations of the US Capitol Hill riot indicate that payments to the domestic terrorists were made in Bitcoin from a French donor who went by the pseudonym “pankkake”.

The BTC transferred to the violent protestors was worth over $500,000 (around 28.15 Bitcoins) and distributed to 22 different digital wallets. Most of the recipient addresses belonged to internet personalities and far-right activists, and the payments were made right before the storming of Capitol Hill.

A report reveals that the French donor left a suicide note a day after he transferred the donations to the right-wing activists and organizations. However, it is yet to be established if the French computer programmer is dead or still alive. The report shows that the mystery donor left the suicide note on a personal blog a day after he transferred the Bitcoin donations.

In the suicide note, “pankkake”, revealed that his health difficulties caused him to take such extreme actions. He further stated that he had “bequeathed [his] fortune to certain causes and certain people.” In other sections of his blog, the donor talked about the collapse of the “Western civilization,” that made him hate his heritage and ancestors. The anonymous donor wrote:

“I care about what happens after my death. That’s why I decided to leave my modest wealth to certain causes and people.”

Chainalysis blockchain and cryptocurrency analysis firm conducted investigations into the Bitcoin transfer and identified that Trump supporter and internet personality Nick Fuentes was the largest beneficiary of the donations. He obtained 13.5 Bitcoin worth around $250,000.

Chainalysis said that it cannot be determined for sure whether the funds from the French donor assisted in financing the US Capitol Hill riot. However, Acting US attorney, Michael Sherwin, stated that the investigation into the matter has so far rendered it as unprecedented, with prosecutors treating the case as a counterintelligence or counterterrorism investigation.

Crypto Used Far Less than Fiat to Launder Money

Last week, ECB President Christine Lagarde said that Bitcoin is a “funny business” asset that is used for money laundering and needs global regulation.

Christine Lagarde was unequivocal in her criticism. She stated:

“For those who had assumed it might turn into a currency — terribly sorry, but this is a highly speculative asset which has conducted some funny business and some interesting and totally reprehensible money-laundering activity.”

Despite the claims of Janet Yellen and ECB President Lagarde, a SWIFT report published last year in September entitled “Follow the Money” revealed that money laundering via cryptocurrencies is not a preferred tool for criminals.

The report highlighted that traditional methods like cash mules, cash businesses, and drug trade remain at the forefront of laundering activites, and criminals are still using cash over crypto in these activities at a ratio of 800:1.

The SWIFT report, however, did find that the use of cryptocurrency for laundering stolen bank funds will rise in the future and privacy coins and online marketplaces are an upcoming threat.

Per the report:

“Favorable factors include the growing number of altcoins (alternative cryptocurrencies) that have recently launched and which focus on providing full transaction anonymity,” it noted. However, private cryptocurrencies and online marketplaces are an upcoming threat.”

President-elect Joe Biden will officially take office tomorrow and Janet Yellen is anticipated to be the new United States Secretary of the Treasury.

US Treasury Secretary Janet Yellen Cites Crypto’s Growing Role in Terrorism Finance

United States Treasury Secretary Janet Yellen said yesterday that she sees the “promise” of cryptocurrency but also is wary of the reality that crypto is increasingly being leveraged to finance terrorism and launder funds.

Speaking at a financial sector innovation policy roundtable on Feb.10, Yellen said in her opening remarks:

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

The former Federal Reserve Chair, Yellen has once again warned that cyberattacks and digital currency-related crimes were on the rise and maintains that while cryptocurrency has a lot of potential to revamp our financial system—crypto’s illicit use cases are a “growing concern.”

Yellen made reference to the Anti-Money Laundering Act passed into law by Congress last December that requires the U.S. government to update its anti-money laundering/countering the financing of terrorism (AML/CFT) laws—according to Yellen, the existing regulatory framework has not been updated much since its creation in the 1970s.

With the rise of digital assets and cyberfraud, the Treasury Secretary said:

“The update couldn’t have come at a better time. As this group knows very well, we’re living amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy.”

Yellen added that the United States Treasury Department, alongside regulatory agencies under its supervision, “can better stem the flow of dark money.”

Yellen added:

“And we’ll be better positioned to stop adversaries from hacking our institutions or interfering in our elections.”

Treasury Secretary Yellen’s latest comments on the use of crypto in illicit activities like money laundering and terror finance come after her initial warning from her Senate confirmation in mid-January.

Yellen initially said that the US needs to examine how it can curtail the use of crypto for illicit financing which she explained was its main use during her Senate confirmation hearing last week, She made the comments in response to a question from Sen. Maggie Hassan (D-NH) who asked about the potential for cryptocurrency to be leveraged in financing criminal and terrorist activities.

While it appeared that Yellen was destined to be another old-world cryptocurrency opponent, a written statement published on the Senate Finance Committee website on Jan 22, indicated that the incoming Secretary of the Treasure may have a more positive view on the potential for crypto to reshape the United States financial system.

In her statement, Yellen did again state the need for the US to confront the use of illicit activities leveraging crypto, this time she added that she also plans to encourage legitimate leveraging of digital assets.

The former Fed Chair wrote:

“I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.”

US Lawmakers Question Tron and DLive

Yellen’s new comments also come just days after two U.S. lawmakers published an open letter to Tron founder Justin Sun and DLive CEO Charles Wayn in the wake of the Capital riots—asking them to explain how they moderate extremist and white supremacist content.

The pair of U.S. lawmakers—who are part of the House Select Committee on Intelligence—published the open letter on The Verge on Tuesday and asked Sun and Wayn to explain how they plan to prevent extremist content from being broadcast on the crypto streaming platform in the wake of last month’s attempted insurrection in Washington at the confirmation of President Joe Biden.

The US representatives asked for Sun and Wayn to explain in detail how DLive, the decentralized video streaming alternative to YouTube, can protect younger users from extremist content and whether the company has any methods to identify bad actors financing extremist content.

A hearing will be held later this month by the House Financial Services Subcommittee on the financing of domestic terror following the Jan. 6. Insurrection on Capitol Hill where the discussion will likely focus on a $500,000 transaction in Bitcoin made by a French extremist and blogger to pay right-wing figures who appear to be heavily involved in the attack.