The deputy secretary of the US Treasury says cryptocurrencies do not account for the lion’s share of terrorist groups’ financing.
Speaking in London at a Royal United Services Institute event, Wally Adeyemo says terrorism financing is evolving and the advent of crypto offers bad actors a new channel to move their money.
“When the modern internet came into play, a lot of these groups started raising money using things like Venmo and Paypal – these products. We have worked closely with these companies to prevent them from being abused by these actors. As evolution continues, the next source of that will be cryptocurrency.”
Adeyemo says crypto is not yet a major source of funding for terror groups, but the digital asset industry must work with authorities to prevent bad actors from using the asset class to finance their illicit activities.
“What we know about terrorist groups and those who try to move money illegally is that they will use any new technology to try to do so.
Today, I would say that crypto use does not make up the vast majority of the ways these groups are funded. What we will do, however, is prevent this from becoming the way they are funded in the future by taking action now.”
Adeyamo says Section 311 of the US PATRIOT Act is a way to prevent terrorist groups from using crypto to raise money.
“The 311, which went after mixers – and mixers are a really fancy way of talking about a device that is used to allow people to disguise where their money comes from and where their money goes. We’re going to take action to ensure that where we see these things being used to help terrorists or others hide their money, we go after them.”
Earlier this month, the Financial Crimes Enforcement Network (FinCEN) proposed a proposal that financial institutions and agencies implement record keeping and reporting requirements for transactions conducted through cryptomix services.
Adeyemo’s statement comes after rumors that the militant group Hamas has raised millions through their crypto fundraising campaigns. However, blockchain analytics firm Elliptic says there is no data to support claims that crypto is a major source of funding for Hamas and other terror groups.
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