Bitcoin:
An innovation or terror funding mechanism, or perhaps a honeypot for some three letter agencies!
A supporter of Sunni terror group ISIS has outlined how to support the movement using Bitcoin. In a PDF posted to a Wordpress blog, a man calling himself Amreeki on Twitter, explains the problems militants face in funding their operations. “One cannot send a bank transfer to a mujahid or suspected mujahid without the kafir governments ruling today immediately being aware. Perhaps, a few incredibly wealthy Muslims may find ways to avoid this system, especially ones in Arab countries; however the majority of Muslims are incapable of donating to those who need it most.”(Sic) The solution is Bitcoin, he says. It is anonymous and decentralized, and with an extra layer of encryption called mixing, the author says, transactions would be untrackable. He uses former online marketplace Silk Road as an example of a once-successful instance of how illicit goods could be purchased online with the digital currency.
The three-page PDF, which was posted on an Islamic State of Iraq and the Levant (ISIL) affiliated Twitter account, appears to substantiate concerns that extremist groups may be exploiting the anonymity provided by crypto-currencies to fundraise overseas, especially in Western countries with robust counter-terror financing regimes. The alleged ISIL user explains that the rise of kufar (infidel) currencies has “eliminated sadaqah (charity) for jihad on large scale,” as “kufar governments are immediately aware” of any transfer to the mujahideen (Sic). The user notes that while bitcoins and online black-markets are often used by the kufar to intoxicate themselves, they could also be used by Muslims to purchase weapons or donate directly to the mujahideen without the risk affiliated with traditional money transfers. The user further advises ISIL sympathizers to set up Dark Wallet accounts, which mix all transactions into an indecipherable mess to confuse those trying to spy on transactions. Dark Wallet, a bitcoin application that allows users to virtually store and send bitcoins, encrypts and mixes together its users’ payments to enable practically untraceable flows of money online by making it difficult to tell whose money has gone where.
The Department of Defense has initiated its own investigation into the possibility of the bitcoin usage. The Combatting Terrorism Technical Support Office is spearheading a program that will help the military understand how modern technologies could pose threats to national security, including bitcoin and other virtual currencies.
Some high-profile cases have highlighted bitcoin’s vulnerability, including Silk Road, the digital black market shut down in October by the FBI. Silk Road accepted only bitcoin for payments. The site’s founder was charged with drug trafficking and money laundering. A Treasury Department probe found no evidence of bitcoin being used to finance terrorism, but the anonymous nature of the transactions still has many law enforcement officials worried.
Silk Road has resurfaced and some security researchers are speculating that the re-launch might have happened with the tacit agreement of the FBI, either to build up to another profitable seizure of Bitcoins, or so the new site can function as a ‘honeypot’ to attract and later prosecute participants.
”Despite several recent takedowns of similar sites, there’s no shortage of people willing to risk site administration to resume black market operations,” said Craig Young, security researcher for Tripwire.
“The obvious question of course is whether these are individuals looking to continue providing the services and philosophy of Silk Road, or if it a law enforcement honey pot designed to identify and prosecute the sites users.”
When it boils down to it, anyone using a site like this to conduct illegal business should not expect to remain anonymous forever.
