On 4 March 2024, CTED hosted an important discussion on the latest trends and shifts in the use of different types of virtual assets by terrorist groups affiliated with Da’esh (ISIL) / Al-Qaida and their supporters, including for their fundraising campaigns. The briefing offered Member States practical insights into how virtual assets are used for terrorism financing purposes, and how related technologies, including blockchain analytics, can help detect and suppress such abuses.
Amidst the ongoing work on draft non-binding guiding principles on measures to prevent and counter the terrorist use of new payment technologies and fundraising methods pursuant to the Counter-Terrorism Committee’s Delhi Declaration, the briefing offered Member States practical insights into how virtual assets are used for terrorism financing purposes, and how related technologies, including blockchain analytics, can help detect and suppress such abuses.
The four main take-aways shared by TRM Labs experts based on their analysis on trends were that (i) the Syrian Arab Republic (specifically areas under the control of Hay'at Tahrir al-Sham, or HTS) remained a major hub of cryptocurrency used by Da’esh (ISIL) / Al-Qaida affiliates and their supporters; (ii) there has been an increase in the use of cryptocurrency by Da’esh affiliates and their supporters in Asia; (iii) stable coins have emerged as the preferred cryptocurrency; and (iv) terrorist groups are improving their operational security.
Notwithstanding these trends illustrating the increased abuse of virtual assets by terrorist groups and their supporters, the majority of funds used for terrorism financing purposes continue to be raised and moved through cash, hawala-like services and traditional financial institutions.
Experts emphasized that cryptocurrency transactions are traceable and immutable, which means that blockchain intelligence can help identify, track, and trace the flow of funds moved through such transactions in ways that are just not possible with cash and other methods.
Public-private partnerships (PPPs) are crucial in fighting terrorist financing, especially as it relates to the use of cryptocurrency. Indeed, the Insight Briefing was a spin-off focused conversation from a multi-stakeholder launch event convened by CTED last month on PPPs. This brought together leading experts from the private sector dealing with blockchain intelligence, innovative and AI-driven compliance tools, crowdfunding platforms and digital assets trade offering their niche knowledge and top-notch technologies to assist authorities in detecting and suppressing terrorism financing, and to protect their sectors from TF abuse.
Reference materials and cited publications from TRM Labs:
- Terrorist Financing: Six Crypto-Related Trends to Watch in 2023
- TRM Finds Mounting Evidence of Crypto Use by ISIS and its Supporters in Asia
- Fundraising Campaigns for ISIS Families: Analyzing the Use of Cryptocurrency
- Jordanian National Arrested in Spain For Sending 200,000 Euros in Cryptocurrencies to the Islamic State
- Turkish and Tajik authorities make key arrests in terror network disruption