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Is Bitcoin the new untouchable way for terrorists to get funds?

A poster published by the Qassam Brigades requesting financial support under the slogan “Support the Resistance.”

Hamas has been designated a terrorist organization by Western governments and has been locked out of the traditional financial system. But this year, its military wing has developed a very sophisticated campaign to raise money using Bitcoin. In the latest version of the website set up by the Qassam Brigades, every visitor is given a unique Bitcoin address where he or she can send the digital currency, a method that makes the donations nearly impossible for law enforcement to track.

And this is just the beginning. Terrorist groups started using the blockchain in 2012, it took time to take off because of the technical sophistication of the new tool, and terrorist groups have methods of using the traditional financial system without needing Bitcoin : Hamas has traditionally survived on hundreds of millions of dollars of donations from foreign governments like Qatar and UN support. The Islamic State in Syria subsisted on taxes and fees it collected in the territories it controlled… but crowdfunding might be the revolution of terrorism financing.

Cryptocurrencies are attractive to lawbreakers because they make it possible to hold and transfer money without a central authority, like PayPal, that can shut down accounts and freeze funds. Anyone in the world can create a Bitcoin address and begin receiving digital tokens without even providing a name or an address.

Signs that terrorists were using Bitcoin had been sporadic for several years. But for long, their amateurism has been very flagrant. Early attempts were filled with false starts and many mistakes. However, terrorists are tenacious. Most terrorists’ early experimentation with bitcoin occurred on the dark web or behind private chat-channels. Terrorist groups now have their own crypto-developers, and other talented blockchain investors that understand very well the technology and create innovative solutions in order for the blockchain to work in their favor.

It all changed in 2016 when a group on the Gaza Strip called Ibn Taymiyya Media Center publicly solicited bitcoin donations on Twitter and Telegram to prop up a funding campaign called Jahezona… The goal : raise $2,500 per fighter; however, over a two-year period, the group only raised about $2,500 in total based on the price of bitcoin from the day of these contributions. Likewise, the group made another critical error: they publicly claimed a BTC address online.

Since then, the Qassam Brigades learned to cover their tracks. Instead of keeping a wallet with a Bitcoin exchange, which can track information about customers and send it to the authorities, the terrorist group set up wallets fully under its control. They appear to have borrowed the method from a media site connected to the Islamic State, which has been generating endless numbers of new Bitcoin addresses to collect money for nearly two years.

Due to the lack of purchasing power and anonymity, some people have deduced that cash is still king in the world of terror financing, declaring that bitcoin, and cryptocurrencies in general, are not an immediate threat. But recently, terrorists have found a way to essentially fully anonymize themselves on the bitcoin blockchain, and if mass adoption of this cryptocurrency actually occurs, extremists could easily make bitcoin a vital part of their fundraising.

Come January 2019, the landscape evolved even further. Al-Qassam Brigades and ISIS may be the first groups to use this funding, but they definitely won’t be the last.

Cash might be king, but Bitcoin could quickly become its queen.

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