OUR PICKS: CRYPTOCURRENCY & TERRORISMIs Crypto Financing Terrorism? | Hamas and Cryptocurrency Fundraising | The Digital Terror Financing of Central Asian Jihadis, and more

Is Crypto Financing Terrorism?  (Ephrat Livni and Joe Nocera, New York Times)
A report that terror groups raised more than $130 million in crypto during recent years has set off a debate in Washington and finance circles.

Hamas Militants Behind Israel Attack Raised Millions in Crypto  (Angus Berwick and Ian Talley, Wall Street Journal)
Digital currency transactions highlight how U.S. and Israel have struggled to sever the access of Hamas, Palestinian Islamic Jihad and Hezbollah to foreign funding

Misunderstanding Crypto and Terror Financing Leads to Bad Policy  (Brian Brooks and Sujit Raman, Bloomberg Law)
Politicians have argued that terrorists benefit disproportionately from illicit use of crypto. These claims, however, have proven to be overblown, and reflect deeper misconceptions about crypto that need to be understood and corrected if the US is to get its policy right.

Is Cryptocurrency Helping Hamas Fund Terrorism?  (Sébastian Seibt, France24)
The US and Israel have stepped up their efforts to limit cryptocurrency transfers to Hamas since the group’s brutal October 7 attacks on Israel. Bitcoin, Dogecoin and Ethereum are increasingly blamed as conduits of funding for Islamist groups, but to what extent is this justified?

Cryptocurrencies and Risk Under the Antiterrorism Act  (JonesDay)
Terrorists may be increasingly turning to cryptocurrencies to evade sanctions and finance terrorist acts, as recent prosecutions and reports suggest. Under the Antiterrorism Act (“ATA”), as amended by the Justice Against Sponsors of Terrorism Act (“JASTA”), companies working with cryptocurrencies may expose themselves to civil terrorism litigation or governmental investigations if they indirectly support operatives perpetrating terrorist acts—such as through the provision of banking services, or assistance transacting with, transferring, or “mixing” cryptocurrencies.

Correcting the Record: Inaccurate Methodologies for Estimating Cryptocurrency’s Role in Terrorism Financing  (Chainanalysis)
Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency. Terrorist organizations have historically used and will likely continue to use traditional, fiat-based methods such as financial institutions, hawalas, and shell companies as their primary financing vehicles. There is no doubt that funds raised by terrorist organizations – no matter how small – are significant and every method should be investigated. But we have also seen overstated metrics and flawed analyses of these terrorist groups’ use of cryptocurrency, and feel compelled to address some misconceptions.

The Role of Cryptocurrency in Financing Terrorist Organizations  (PBS)
Shortly after the Oct. 7 terrorist attack on Israel, the U.S. Treasury Department sanctioned a virtual currency exchange in Gaza that it said had facilitated transactions for Hamas using decentralized digital currencies. Former federal prosecutor Ari Redbord joins Ali Rogin to discuss how terrorist groups are using cryptocurrency to fund their operations and how law enforcement is responding.

Terrorist Financing: Hamas and Cryptocurrency Fundraising  (CRS)
Although Hamas has reportedly solicited cryptocurrency donations, the scale and effectiveness of these efforts remain unclear.

The Digital Terror Financing of Central Asian Jihadis  (Nodirbek Soliev, Combatting Terrorism Center)
Like all terror groups, Central Asian terrorist groups are continuously attempting to diversify how they finance their activities to avoid detection. Drawing on various reports, court documents, an array of research literature, and online extremist materials, this article explores some innovative methods that Central Asian terrorists have recently experimented with to finance their activities. Their online financing efforts tend to involve three stages. The first is the dissemination of fundraising propaganda and contacting prospective donors via online public accounts. The second is communication via encrypted messaging apps to identify a suitable mode of transaction and to provide security protocols. The third is the transaction itself. Understanding these mechanisms can help enhance relevant countries’ response strategies against terrorism financing risks.

Terrorists Raised $130m in Crypto Since 2021; Sought More Via Social Media After Attack  (Gianluca Pacchiani, Times of Israel)
In recent years, Hamas and Islamic Jihad managed to fund terror operations through large international donations via blockchain technology, bypassing banking restrictions