Bitcoin links to terrorism risks

Parsing the Iran portions of the Worldwide Threat Assessment. Fanusie 11th June - The Cipher Brief. Is there bitcoin links to terrorism risks evidence of terrorist groups turning to virtual currencies for funding? Why do you think that is?

No, not if by significant you mean signs that multiple terrorist organizations are using virtual currencies as a consistent way to receive or transfer funds. What we can infer from the few data points in the public domain is that, among jihadist groups, some group members or sympathizers with strong technical backgrounds are experimenting with bitcoin transactions.

However, the campaign only received a few hundred dollars total, according to analysis of the bitcoin address. Indonesian authorities earlier this year reported that a Syria-based Indonesian with the Islamic State sent funds to Indonesia for attacks. However, they also said he used PayPal. These are examples of terrorists using virtual currencies, but probably are not indicative of a major push. Right now, virtual currencies are harder to acquire and spend than, say, prepaid cards, or the most anonymous way to fund terrorism — cash.

And most terrorists operate in a world where fiat, or government-backed, currency is needed bitcoin links to terrorism risks their expenditures, so a virtual currency where one has to figure out how to cash out without tipping off authorities only complicates a funding scheme.

Bitcoin activity can be tracked because the currency has a public distributed ledger that logs all transactions. So, even if someone is operating seemingly anonymously, transactions analysis might help investigators uncover their identity.

Any terrorist organization seeking to exploit virtual currencies as a major part of its financing would need a high level of technical sophistication to not only use cryptocurrency tools in the first place, but to do so with confidence that their transactions would not lead to their discovery and disruption. This would be risky and it appears that most members of terrorist groups do not currently fit this profile.

Do you see groups turning to virtual currencies more in the future? Would this be in the form of taking donations or would they turn to cybercrime, such as ransomware, for revenue?

The threat for terrorists to use virtual currencies might arise in a bitcoin links to terrorism risks where the worlds of bitcoin links to terrorism risks and cybercrime converge. Using virtual currencies for donations probably would not make sense from a terrorist's perspective.

Soliciting donations usually means making overtures to a broad, unidentified audience. With computer science expertise, cybercriminals build complex methods and schemes to steal in a bitcoin links to terrorism risks environment. Hypothetical scenarios could be imagined where this could become the case, but typically, motivations between terrorists and cybercriminals are not aligned.

What law enforcement and intelligence officials should be watching out for is terrorist technical adaptation and any converging motivations and allegiances with cybercriminals. Also, one should consider that young adults are more inclined to use new financing and payment methods, compared to older demographics. Any shifts in use of virtual currencies by terrorist groups probably would come from the influence of younger people in those groups.

Part of what appears to be inhibiting terrorist groups from turning to virtual currencies is that they often need to convert it back into physical currencies to make purchases and pay salaries.

Do you see this changing with terrorist groups ordering equipment online through dark web marketplaces? The dark web as a resource for various illicit actors is expanding and unfortunately, it probably does provide opportunities for terrorists who may seek purchases bitcoin links to terrorism risks onesies and twosies as opposed to large-scale transactions.

Dark web marketplaces often accept a variety of virtual currencies, so most buyers know a bit about transacting in cryptocurrency and possibly also how to use mixers and other anonymizing tools. But again, a shift would have to happen where terrorists become more cyber-minded and technically oriented for this to be a major way of securing equipment.

The terrorist bitcoin fundraising campaign I mentioned earlier was pegging much of its funding solicitation to weapons acquisition. If terrorist groups did successfully raise significant virtual currency donations, purchasing on the dark web might be a logical next step, but such fundraising appears to have been minimal.

Would this be a major development in how terrorist groups inspire and support lone wolf attacks? For example, ina Virginia teenager who was an Islamic State supporter posted a white paper he wrote encouraging others to fund IS through bitcoin payments.

So, this idea of using virtual currencies as a way to support terrorism has been out there for a few years, without it seeming to play a significant role in inspiring others. And one should also consider that in the case where a lone wolf is already involved in criminal circles, he or she may have relatively easy access to black market weapons in person. If so-called lone wolf terrorists are adapting in any way, it has bitcoin links to terrorism risks in finding ways to commit atrocities without guns or bombs.

Al-Qaeda and IS have already encouraged supporters in the U. Purchasing weapons on the web would be riskier. How could officials concerned with counterterrorism financing disrupt terrorist use of virtual currencies in the future? Could this have a detrimental impact on the growth of virtual bitcoin links to terrorism risks use for legitimate reasons? Recruit and retain technically-savvy people to work in counterterrorism CTespecially people with computer science backgrounds who either already understand virtual currencies or would be quick learners to help agencies adapt in this quickly evolving space.

Terrorists will not use virtual currencies if they find that intelligence agencies and law enforcement are effective at catching them by it. For the counterterrorism experts who currently do not have a technical background, all is not lost. This space is stimulating from an bitcoin links to terrorism risks perspective.

I think if CTers start learning just the basics about how virtual currencies are used and how the blockchain can be analyzed, it will add to their ability to identify how terrorists might innovate.

The key to good counterterrorism work is staying ahead of the terrorist curve. And even in the midst of the WannaCry ransomware attack and the occasional media story about the illicit use of cryptocurrencies, there appears to be growing bitcoin links to terrorism risks business and public interest in the technology. In fact, legitimate interest does not seem to be ramping down at all. Follow him on Twitter SignCurve.

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