Bitcoin has its detractors when it comes to its lack of transparency, with the more uninitiated claiming that its anonymous transaction method makes it a haven for terrorist funding. Whilst it is undeniably true that cryptocurrency is used to fund terrorism, as are gold, cash, and other commodities, it is far from being anonymous.
One Long Island resident found this out the hard way last week – on Friday, Zoobia Shahnaz was jailed for 13 years for funding ISIS partially through cryptocurrencies, having funnelled a total of over $150,000 to the group.
$62,000 Sent to ISIS in Crypto
Shanaz, who was arrested in July, 2017, at New York’s JFK airport boarding a flight to Turkey, was accused of defrauding numerous financial institutions to obtain money for ISIS, including taking out a loan for some $22,500 and fraudulently obtaining more than a dozen credit cards.
She used the funds to purchase approximately $62,000 in Bitcoin and other cryptocurrencies, combining these with multiple wire transfers totalling more than $150,000 and sending it to individuals and groups in Pakistan, China, and Turkey that acted as fronts for ISIS. Shanaz pleaded guilty in November 2018 to providing material support to a foreign terrorist organization and attempting to travel to Syria to join ISIS.
Cash Still the Terrorists’ Favorite
Shanaz’s case shows that, far from being a safe haven for illegal activities, Bitcoin is much more traceable than other forms of payment. With every transaction being published on the blockchain for all time, once investigative authorities are able to establish a connection between an individual and an address or transaction ID it is game over for the individual.
Shanaz was identified at a time when regulations were much less in evidence than they are today, and with 2020 set to bring in the toughest regulations yet, it is highly likely that illegal cryptocurrency use will continue to fall behind that of cash, which is just about as anonymous as it gets and is still the terrorists’ fundraising medium of choice.