No certainty that digital currencies are used for terrorist funding

US President Donald Trump has again insisted that cryptocurrencies are being used by terrorists and ‘rogue states’, for money laundering and terrorism financing.

However, according to the German Federal Ministry of Finance, there is no certainty that digital currencies are used for terrorist funding to a large extent, classifying the risk as low.

Krypto Szene has published a comparison of the two opinions, subjecting the opposing arguments to fact checking, and found that there are doubts about the cryptocurrencies being a forerunner of terrorism. The number of recorded money laundering cases has actually dropped by 13.61 per cent since the crypto-boom in 2017, with the Islamic State, for example, financed through taxes, fees, oil sales, and looting.

Additionally, the ‘Strategy Against Money Laundering and Terrorist Financing’ reports that technology offers opportunities to combat money laundering and terrorist financing. It says that money laundering with cryptocurrencies is theoretically possible, but due to the lower degree of anonymity compared to cash, the risks are still high.

Raphael Lulay, the analyst for Kryptoszene, said: “The fight against cybercrime needs to be met with full force. But if you look at the facts, it becomes clear that there is little evidence that digital currencies are being criminally misused on a large scale.  The reason for that: contrary to what many think, currencies like Bitcoin are pseudonymous and not anonymous.  Anyone who acts against the law, therefore, faces high risks."

Kryptoszene.de is a news and information platform that publishes cryptocurrency forecasts, investment news, background reports, analyses, and instructions for buying and trading cryptocurrencies.