RAND Corp dispels notion that terrorists use cryptos to fund activities


cryptocurrencies

From the advent of Bitcoin, crypto bashers have shouted from the rooftops that terrorists were using the supposed anonymity of the blockchain to launder money and fund their nefarious operations across the globe. The internationally respected RAND Corp., known for the research it has provided the U.S. Military, released a report that refutes this notion and classifies it as just one more urban myth that needs to be forgotten.

According to its report, entitled “Terrorist Use of Cryptocurrencies”: “Cryptocurrencies are simply too undeveloped to be of much use to terrorists.” Yes, terrorism is real, but the need for ready cash or another medium for the “purchase of weapons, payrolls, supporting attacks, and other operational activities” is ever present, and the availability of cryptos as a medium of payment is just not developed enough to suit their needs.

The report admits that cryptos could be an alternative:

Traditionally, terrorists have funded their operations through black-market activities such as making and selling drugs, human trafficking, and a plethora of other deplorable practices. This money then needs to be laundered and moved around the globe securely. This need presents a serious problem. The international banking system has safeguards in place to restrict this type of activity. While there are ways to get around these restrictions, the potential for the nefarious use of cryptocurrency is definitely there.

But cryptos are limited at this time:

The limited reach of cryptocurrencies at present is a significant challenge, especially in the regions where terrorist groups operate. For example, despite the large network of bitcoin-accepting vendors and services, there are few bitcoin ATMs in the Middle East; outside of Israel, the only such ATM operating as of January 2018 was a deposit-only ATM in Jubail, Saudi Arabia, with a deposit limit of $500-$600.

The small size of cryptocurrency markets can be a hindrance, as well, since large movements of funds can have a large impact on price and can be tracked easily. Terrorist groups can put together millions of dollars from their illicit activities, but attempting to hide them with small privacy tokens, like Monero, which RAND studied, is self-defeating because any large transactions would stand out and expose them. According to the report:

Large transactions have impacts on price; demand increases are reflected in publicly visible prices, making the transaction non-anonymous.

While the present state of cryptocurrencies, their acceptance at the point-of-sale, and the questions of privacy and anonymity remain in a formative phase, the report highlights the fact that the future is uncertain. Technology will eventually enable more access to networks across the globe. Crypto wallets may become as commonplace as any other application on a smart phone set. Volumes and convertibility may become ubiquitous enough to satisfy the needs of terrorist groups in future, without needing access to fiat.

As for today, terrorists have found ways to support their operations, despite decades of harsh banking restrictions and government imposed constraints. The belief that these groups are actively using cryptocurrencies, a notion that crypto haters continue to perpetuate, is, according to the RAND report, not supported by current evidence or research. In other words, as one reporter framed it:

The issue of terrorists using cryptocurrency is in some ways a red herring.

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RAND Corp dispels notion that terrorists use cryptos to fund activities

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