It has come to light that terrorist organizations are being aided using cryptocurrencies. According to Alexander Bortnikov, the Russia’s FSB director, the practice is becoming rampant. According to RBC, a local news portal, the FSB, which quoted Tass, a media agency, the revelation came during the heads of security agencies of Commonwealth of Independent States (CIS) member states.
According to Bortnikov the terrorism organizations are moving crypto through electronic payment systems:
“Electronic payment systems and cryptocurrencies are increasingly being used by terrorists to move money received from some states and organizations that support the global terrorist network.”
According to the FSB director, the financing comes from illegal oil, slave and other criminal trades. He goes on to add that the groups are using the ‘hawala’ money transfer system. The transfers in the system are not documented and are channeled through a broker network.
Terrorist Organizations Getting Smart
Last year, the director told a local media that the cross border terrorist groups are getting tech savvy. They are improvising systems that are compatible with digital currencies, electronic banking and special encryption to evade the special security operatives.
To date, according to Bortnikov, there are approximately 5,000 members belonging to various terror organizations stationed in CIS member countries borders with many located in Afghanistan’s north region.
In early May this year, it was reported that the Sri Lanka suicide bombing by ISIS using Bitcoin financing. According to intelligence reports by Whitestream, the bombing caused 253 innocent civilian deaths.
Russia Mission to Combat Terrorism
Russia has taken a bold step to combat the terrorism vice and has its eyes set on the retail banking service users. One of the largest banks in Russia, Sberbank recently requested their customer to provide crypto earning information in five days. According to a Facebook update, the bank was seeking to find out whether the client owns any mining equipment and whether the right documentation is available to ascertain lease or ownership of the equipment.
The letter which was sent on 15th May was posted on Facebook by the Toxenbox.io co-founder Vladimir Smerkis. Toxenbox is a crypto trading outfit. The letter recipient wanted to remain anonymous after funding his Sberbank account with fiat currency converted from crypto
Most Russian Facebook goers and commentators did not believe that the Sberbank would go that far but the letter has been confirmed as authentic by the Russian Forbes.
Bitcoin Might Tear Russia Apart
According to Nikolay Arefyev, Russia’s First Deputy Chairman of the State Duma Committee on Economic Policy, Bitcoin could be an enabler to drain the entire country’s capital to offshore accounts. This, according to Arefyev is an addition threat to the growing terrorism crypto funding.
Around 210 trillion rubles have been moved out of the country since 2014. According to statistics, the figure represents the country’s annual budget and the siphoning has affected the local economy. According to the Tax Justice Network, Russia is losing to money transfers offshore. The Network adds that around $800billion has been moved offshore from the 70’s to 2010 with Arefyev adding:
“If the cryptocurrency had been worked then, we would have been completely ruined today, given that all financial capital […] would be taken out of Russia, and the country would have ended. The cryptocurrency was created specifically to ensure that the state has no control over financial flows.”
However, Russia is not anti-Bitcoin if the Mueller Report is anything to write home about. The US document indicates that the Russian military intelligence arm used BTC to purchase VPNs and domains during the 2016 presidential election.