The Deputy Secretary of the US Treasury says cryptocurrencies do not account for the lion’s share of terror group financing.
Speaking in London during a Royal United Services Institute event, Wally Adeyemo says that terrorist financing is evolving and the advent of crypto provides bad actors with a new channel to move their funds.
“As the modern internet came into play, many of these groups started to fundraise using things like Venmo, Paypal – these products. We worked closely with those companies to prevent them from being abused by these actors. Now that evolution continues, and the next source of that is cryptocurrency.”
Adeyemo says crypto is not yet a significant source of funding for terror groups, but the digital asset industry needs to work with authorities to stop bad actors from leveraging the asset class to fund their illegal activities.
“The thing that we know about terrorist groups and those who look to move money illicitly is they’re going to use any new technology to try and do that.
Today, I would say that the use of crypto is not the vast majority of the ways that these groups are funded. The thing that we’re going to do though is prevent it from becoming the way that they’re funded in the future by taking actions now.”
Adeyamo says Section 311 of the USA PATRIOT Act is one way of preventing terror groups from using crypto to raise funds.
“The 311, which went after mixers – and mixers are really a fancy way of talking about a device that is used to allow people to disguise where their money has come from and where their money is going. We’re going to take actions to make sure where we see these things being used to help terrorists or others hide their money, we’re gonna go after them.”
Earlier this month, the Financial Crimes Enforcement Network (FinCEN) proposed that financial institutions and agencies implement record-keeping and reporting requirements for transactions that go through crypto mixing services.
Adeyemo’s statement comes following rumors that the militant group Hamas collected millions from their crypto fundraising campaigns. However, blockchain analytics firm Elliptic says there’s no data to support claims that crypto is a significant source of funding for Hamas and other terror groups.
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