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Cryptocurrencies have become on everyone’s lips again since the terrorist organization Hamas killed more than 1,400 people in Israel. Hamas is supported by millions of dollars in donations every year. Conducting some transactions with cryptocurrencies undermines the reputation of digital currencies and requires stronger regulations. According to the Financial Times, Israeli law enforcement officials seized digital tokens and coins worth several million dollars. More than 100 accounts are said to have been blocked on Binance, the world’s largest crypto exchange, alone.
Alongside Binance, other crypto exchanges and Zug-based crypto financial services provider Bitcoin Suisse are also unexpectedly finding themselves under the spotlight. So how problematic is financing terrorism with cryptocurrencies?
There is great transparency in transactions
The United Nations assumes that crypto payments in terrorist financing will increase significantly. This can be explained, among other things, by the fact that the trading volume of cryptocurrencies has generally increased greatly. According to Fabian Schär (34), crypto expert and professor of fintech and blockchain at the University of Basel, criticism of cryptocurrencies in connection with terrorist financing is often untenable. “All transactions can be viewed on a public blockchain and analyzed by researchers, law enforcement, and any other interested parties,” he says.
Although there is the possibility of hiding the source of the transaction using so-called mixers, even in this case there remains a trace that the relevant crypto asset has come into contact with such a mixer. Schär therefore sees no reason for further requirements at the moment. “Financial intermediaries are already obliged to make appropriate disclosures about payment flows and the persons involved.”
This is what Bitcoin Suisse does
This is also the opinion of Bitcoin Suisse. «Bitcoin Suisse, a Swiss financial services company for crypto assets, complies with all applicable regulatory requirements. This includes, in particular, applicable laws to combat money laundering and terrorist financing,” said the company’s media spokesperson when asked by Blick.
An important task is the clear identification of customers when starting a new business relationship. “Overall, the same strict laws and regulations apply as at a traditional financial institution,” the spokesperson said.
Technical solution could help criminal authorities
According to the Chainalation platform, only 0.24 percent of cryptocurrency transactions can be attributed to illegal activities. However, volume reached an all-time high of $20.1 billion. It’s probably even higher because not all addresses are recorded, as Chainanaliz wrote.
The problem can be further neutralized with technical solutions in the future. Crypto expert Fabian Schär, together with other authors, recently presented in a highly acclaimed research paper a solution that will protect user privacy and at the same time simplify the fight against illegal actions by law enforcement agencies.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
