On August 25, 2020, House Democrat Rep. Emanuel Cleaver requested for details on the recent seizure of crypto funds meant to finance terrorist activities.
Cleaver, who is the chairman of the House Financial Services Subcommittee on National Security, wrote to Treasury Secretary Steven Mnuchin asking for an update on the confiscation of 300 crypto accounts linked to ISIS and Hamas.
The request comes just two weeks after federal officials successfully seized millions of dollars’ worth of cryptocurrency solicited from unsuspecting well-wishers on terrorist-linked websites.
As we reported on August 14, terrorist groups used BTC as an anonymous means to raise contributions via social platforms Twitter and Telegram. The malicious actors solicited funds in the guise of supporting charity work, including efforts directed towards COVID-19 relief.
The terrorist factions made their donations almost untraceable by providing each visitor with a unique Bitcoin address to send contributions.
Luckily, federal agents managed to track and freeze the digital funds with assistance from Blockchain analytics firm Chainalysis. The operation is the U.S. government’s largest-ever seizure of cryptocurrency meant for terrorism activities.
Lawmakers Intensify Pressure on Terrorist Funding
The latest development comes as lawmakers increasingly recognize the use of crypto in financing terror activities such as purchasing weapons.
In early 2019, Twitter buckled to pressure from U.S. officials to shut down several accounts affiliated with Hamas and Hezbollah. At the time, Twitter’s U.S. Policy Director Carlos Monje Jr. admitted that foreign terrorist organizations have a strong social platform presence.
Monje added that the blocked accounts were used to solicit funds and post recruitment propaganda to benefit various terrorist groups.
Cryptocurrencies are largely anonymous, and there is no central authority to monitor the flow of digital funds. These attributes make them especially attractive for many illicit activities such as terrorism and money laundering.
Security firm CipherTrace recently released a report highlighting that while only a tiny fraction of crypto transactions are used for crime, it’s undeniable that most dark market commerce is transacted in digital cash.
U.S. Authorities Are Tackling Crypto-Related Crime
Lawmakers and regulatory bodies are moving quickly to halt crypto-related crimes by studying how terrorist organizations use digital assets to conduct drug trafficking, terrorism, and other harmful activities.
On July 14, 2020, the U.S. Department of Justice launched a three-part webinar series that examined crypto use in a wide array of criminal and terrorist activity.
Similarly, Congressman Rep. Ted Budd introduced a bill in 2018 that would aid in the fight against terrorism by rewarding individuals who provided info that results in crypto-related terrorism convictions.