Terrorist Financing and the Use of Traditional and Emerging Financial Technologies

22 Pages Posted: 19 Sep 2022

See all articles by Maria Jofre

Maria Jofre

Università Cattolica del Sacro Cuore and Transcrime

Alberto Aziani

Università Cattolica del Sacro Cuore and Transcrime

Edoardo Villa

Università Cattolica del Sacro Cuore

Abstract

Though recent publications by international institutions and enforcement agencies suggest terrorist groups are increasingly relying on the use of emerging financial technologies to manage the funding of their activities, there is little evidence supporting this claim. This study sheds light on the employment of traditional and new financial technologies and payment methods for terrorist financing purposes. To this end, we assess the prevalence of the use of different technologies to finance terrorism based on a comprehensive dataset of 1,363 documented cases of terrorist financing. Results confirm the use of emerging FinTechs (e.g., cryptocurrencies) in terrorist financing, although the use of emerging FinTechs is still much rarer than traditional payment systems and technologies. Terrorist financers seem to have a great confidence in the banking system along with the use of cash and foreign shell companies to fund their activities. Hawala systems are also still common in terrorist financing as well as high-value commodities such as gold and diamond. Research and policy implications for law enforcement and public authorities are discussed.

Keywords: Terrorism, Hawala, Cryptocurrency, FinTech, Money Laundering

Suggested Citation

Jofre, Maria and Aziani, Alberto and Villa, Edoardo, Terrorist Financing and the Use of Traditional and Emerging Financial Technologies. Available at SSRN: https://ssrn.com/abstract=4223469 or http://dx.doi.org/10.2139/ssrn.4223469

Maria Jofre (Contact Author)

Università Cattolica del Sacro Cuore and Transcrime ( email )

Largo Gemelli 1
Milan, MI 20123
Italy

Alberto Aziani

Università Cattolica del Sacro Cuore and Transcrime ( email )

Largo Gemelli 1
Milan, MI Milano 20123
Italy

HOME PAGE: http://https://www.transcrime.it/en/staff/alberto-aziani/

Edoardo Villa

Università Cattolica del Sacro Cuore ( email )

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