Cryptocurrencies: The Next Generation of Terrorist Financing?

Abstract

Virtual currencies — which are not legal tender in any country and are not issued or backed by any government — have become an important factor in global funds transfers. But features associated with these so called “cryptocurrencies,” such as transaction anonymity and irreversibility of payments, have made them extremely attractive to cybercriminals, drug dealers, money launderers and those involved in global terrorist funding. In this paper, we examine what these financial vehicles are, how they work and why they facilitate terrorist funding and offer suggestions to members of the antiterrorism community for investigating cases involving virtual currencies and bringing perpetrators to justice

Keywords: Virtual currency, Cryptocurrency, Bitcoin, Non-sovereign currency, Terrorist financing