With every step that the world is taking today, it is foreshadowed by instability and unpredictability. The advancement in the digital world, whether they are minuscule or gigantic in nature, it is not a different scenario. Digital currencies in its very essence are immensely empowering, but as the saying goes “With great power comes greater responsibility,” an eye on such digital advancements has become a requisite.
Once, hiding your money transaction under the carpet required no massive effort. But today with the digitalization of the financial systems it is a tad bit difficult to maintain anonymity. Although another innovation, cryptocurrencies promise to return our privacy and anonymity. Notably, that prize might come at a massive cost.
Over the period of time cryptocurrencies have emerged as the most advanced frontiers of terror financing. Below are a few instances:-
- In June 2015, a Virginia teen was blatantly giving out instructions on how to donate to IS using bitcoins via a Twitter account.
- In 2016, an online jihadi unit of Gaza, Ibn Taymiyya media center ran a campaign on social media to accumulate funds through bitcoins.
- In June 2017, The Wall Street Journal reported a claim by the Indonesian security agencies about the Syria-based Indonesian militant, who was using PayPal and bitcoins to fund IS.
- In December, the Pro-IS websites like Akhbaar-al-Musalmin ( (Arabic for news of the Muslims), and Isdarat were soliciting funds through bitcoin donations.
Note that these are just a few instances among the ones that surfaced and caught our eye. The cryptocurrencies exist under various names such as bitcoins, Monero, Ripples, and Zcash. None of them have a government backing or any legal existence in any financial system. Thus, cryptocurrencies have become a highly attractive venture for the money-launderers, cyber-criminals, and terrorists to continue their anonymity and non-traceability. The anonymity is in the sense that the user does not have to produce any document to validate his or her identity.
Furthermore, in a bitcoin network, the users are not identified as actual names but via an alphanumeric value. On top of it, any amount of money can be transferred instantaneously from anywhere to anywhere and the transactions are instantaneous and irreversible. What makes things more torrid is that such transactions take place on the dark web, an encrypted area of the web with access to only specialized browsers like TOR (The Onion Router) and Freenet. Mostly used by cybercriminals, money launderers, terrorists, dissidents, and journalists to avoid detection. A range of things can be picked up on the dark web, including driving license, passport, utility bills, guns, bombs, and drugs. For example, a website “silk route” that existed on the dark web was a global network of illicit money-launderers, smuggler and all kinds of criminals.
Presented by the perplex challenge, the counter-terrorism community feels the lack of a stable, suitable and reliable solution for their counter-attack. Add in the exponential rise from an average of 100 transactions per day in 2009 to 282,000 transactions per day in 2017 and more problems pile over. It is extremely challenging to spot the cases of terror-financing amongst the millions of global Bitcoin transactions, considering the fact that it all takes place on the dark web.
If we take a look at the scenario from an Indian point of view, the situation is rather grim. For starters, India has better internet infrastructure regarding equipment, speed, and connectivity in comparison to the Middle East and Africa, where the poor internet infrastructure discourages the terrorist groups from using bitcoins. But naturally, India becomes an easily approachable target.
According to a report by Zebpay, a bitcoin exchange, during the last months of 2017, they were adding 300,000 to 400,000 users on its exchange every month as compared to 150,000 in June and July. Additionally, a vast flourishing network of grey-market and the underground economy already exists. To cite an example, a few years back, radioactive mineral cobalt-60 ended up in Delhi’s scrap market, from Delhi University and was being sold in Delhi grey market. God forbid is all of this evolves into an organized online market on the dark web, one imagine no good to come out of it.
The trouble doesn’t end here, the regulatory agencies of the country are poorly skilled, understaffed and archaic. The system or shall we say the legal apparatus is not developed enough to control bitcoins and cyber-crimes. What India needs is to invest massively into building cohesive counter-terrorism and money-laundering experts, who can tackle any challenge that the virtual currencies throw there way.
Although RBI has strictly banned banks from dealing in bitcoins or any other form of virtual currency, it is still impossible to prevent people from using crypto-currencies in future. Besides, cryptocurrencies have a huge potential and somewhere down the line, India might have to open its door for it. Additionally, they do not require endless paper-work, documents, and complicated procedures which add to their appeal.
All is not lost as off yet, thankfully the use of cryptocurrencies by terrorist organizations is still in the stage of infancy. This is due to the rapidly changing and unpredictable nature of bitcoins and the difficulty of converting them into fiat money. On top of it, the lack of advanced IT skills still prevents the terrorist from using cryptocurrencies on a large scale.
In today’s scenario, both sides are balanced as off now, but what if the antibodies get the whiff of the technology faster than the Indian government can stop them. Thus it becomes crucially important for India to regulate and nose dive into the integrities related to Crypto and start preparing a robust strategy to prevent the use of cryptocurrency for criminal and terrorist activities.
The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.” Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.