Trading with the Enemy – How Crypto Scams Fund Terrorism

By Evan Spicer

Director of Cryptocurrency Investigations

If we lose money to a bitcoin scam, our first reaction may be to grieve over our own financial losses. However, crypto trading scams don’t affect just the individual who was cheated. If the money goes to terrorists, many innocent victims could pay the price. 

Criminals who run crypto scams are lurking on the dark web. They may run dozens of dodgy schemes to rob money from people. Others may be involved in human trafficking or kidnapping people for ransom. Recent news stories have confirmed that many of these funds have ended up in the coffers of terrorist organizations as well.

According to Reuters, Israel’s National Bureau for Counter Terror Financing (NBCTF) seized 190 accounts on the crypto platform Binance on suspicion they were used to fund the Islamic State and Hamas terrorist groups. For security reasons, the NBCTF’s documents didn’t reveal publicly the value of the funds seized or how they are connected to these terrorist groups. 

Are Crypto Exchanges Doing Enough to Prevent Crypto Funding of Terrorists?

For its part, Binance released a statement that it is “working closely with international counter-terrorism authorities” and it had no information that would have led it to suspect that the wallets belonged to people associated with terrorist groups because “bad actors don’t register accounts under the names of their criminal enterprises.”

The increasing use of crypto platforms to launder money for terrorist groups has put pressure on Binance to prove that it did everything possible to prevent its platform from being the venue for criminal activities. 

In March of 2023, Binance issued a statement to the U.S. Senate that it was continuing to invest substantial amounts in its compliance program. Also, Binance has emphasized its compliance with European Union anti-money laundering and anti-terrorism regulation. 

Crypto Scams Financing Terrorism Isn’t New

There was fair warning that crypto platforms like Binance would be used to fund terrorism. In a U.S.Treasury report from 2022, it was revealed that the Islamic State was regularly receiving cryptocurrency donations and withdrawing them in cash. 

It was reported by Forbes that the Islamic State terrorist group transferred bitcoin in 2014 and 2015 to get around financial sanctions. In addition, the blockchain allows Russian groups an opportunity to defy sanctions and buy, sell, and launder money in cryptocurrencies. 

A Battle on Two Fronts Against Crypto Scams and Terrorism

It’s clear that crypto scams have evolved from a financial crime affecting individual victims into a means of funding some of the most deadly organizations in the world. 

With the increase in crypto regulations, and more involvement from government agencies, international law enforcement and anti-terrorism watchdogs, there is reason for optimism in the war against terrorist funding. 

Individual bitcoin scam victims can contribute to this effort by reporting fraud and enlisting the aid of fund recovery professionals promptly. It isn’t just a question of retrieving your funds, but also of ensuring they don’t fall into dangerous hands. 

Have You Lost Mony to A Crypto Scam? Contact MyChargeBack Professionals Today

MyChargeBack experts have extensive knowledge, proven methods, and cutting-edge applications, software, and databases. We understand the dynamics of the crypto tracking process and have a working relationship with law enforcement agencies and regulators. We will empower you to pursue results from your claim.