ISIS has £246million Bitcoin war chest to spend on bloody terror comeback campaign, expert warns
ISIS warlords are sitting on a £246million Bitcoin war chest after transferring their looted cash into cryptocurrency.
Security experts fear the terror group’s fighting fund could be far larger after a surge in advertising for donations of virtual money.
ISIS used cryptocurrency to fund the Easter Sunday terrorist attack in Sri Lanka, which killed more than 250 people when suicide bombers attacked churches and hotels in quick succession.
The Islamic death cult was crushed last year when they were driven out of their last enclave in Baghuz in north eastern Syria.
Fears have recently been raised that ISIS sleeper cells have regrouped under new leader Abu Ibrahim al-Hashimi al-Quraishi and are now taking advantage of outbreaks of Covid-19 in Iraq and Syria.
The Counter Extremism Project, a think tank, tracked the trend in a new report, Cryptocurrencies and Financing of Terrorism: Threat Assessment and Regulatory Challenges, launched in an online seminar on Monday.
Its director, Hans-Jakob Schindler, who has worked in the UN’s security council monitoring unit for ISIS and Al Qaeda, told The National the authorities have searched for the group’s missing war chest since 2017.
“I’m wondering if from 2017 to 2020 there has been $300m that we have not found and that’s why I’m thinking this might have been one of the ways it might have been used,” he said.
“This would be an ideal storage mechanism until it is needed. If done right, it would be unfindable and unseizable for most governments.”
ISIS is believed to be the first terrorist group to be prosecuted in court for cryptocurrency activities.
US teenager Ali Shukri Amin was jailed for 11 years in 2015 for providing ISIS supporters with an online manual on how to use Bitcoin to conceal donations.
Mr Schindler said there had been “consistent cases” of ISIS and Hamas using cryptocurrency since 2014.
“From the get go, ISIS has been clearly interested in what can be done with this new technology,” he said.
Dr Schindler said that when digital transactions were broken up into smaller transactions it was “next to impossible” for them to be traced back.
“Cryptocurrency is good for terrorists if they become public because it enables more people to fund them without running the risk of being discovered or stopped,” he said.
Dr Schindler is urging EU governments to collaborate on a regulatory framework for tighter regulations.
“For once you can be ahead of the curve and have time now to work on regulations before it becomes a $100m problem,” he said.
Yaya Fanusie, of the Foundation for the Defence of Democracies think tank, has been studying terrorist groups’ use of cryptocurrency since 2016.
Mr Fanusie said he first noticed a rise in advertisements for digital donations on crowdfunding sites.
He said the publication of ISIS’s digital currency handbook in 2014 was an “important milestone”.
“It shows exactly when supporters of the group looked at ways to make money throughout the world for the ISIS battlefield,” Mr Fanusie said.
“It has grown in sophistication. Instead of one blockchain address there are multiple addresses that are difficult for law enforcers to track.
"We are talking software you can download and you do not have to go through an exchange.”
He said the “saving grace” so far was that “people need to cash out and that limits their movements”.
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“We are going to have to be ahead of the game,” Mr Fanusie said.
Last year a report by US security group the National Security Research Division called for “international co-operation" between police and intelligence agencies in dealing with the problem.
The study said the "speed at which these technologies are adopted" means action would be an important step "to prevent terrorist organisations from using cryptocurrencies to support their activities".