Russian Security Services Insist Digital Assets Are Used For Terrorism

International terrorism has grasped all modern informational technologies and is using cryptocurrencies while also actively broadening its contacts with high-profile hackers, as reported by Alexander Bortnikov, head of Russia’s Federal Security Services (FSS).

“This is not only about aggressive propaganda and recruitment on the Internet, where over 10,000 websites and hundreds of thousands social media accounts exist for this purpose. I am speaking about the massive use of encrypted internet communication tools, electronic banking, cryptocurrencies, and schemes for remote terrorist activity management and it’s financing,” Bortnikov stated in his opening remarks at the Moscow Conference on International Security.

The FSS stopped 25 out of 29 terrorist attacks last year, with all of them coordinated via online messengers from countries such as Syria and Iraq.

However, the allegations that cryptocurrencies are being used to finance terrorism might be far-fetched and ill-grounded. Less than 1% of all Bitcoin-related transactions processed between 2013 and 2016 were combined to finance illegal activities, including terrorism and money-laundering, as reported by a research carried out by Center on Sanctions and Illicit Finance (CSIF) within the Foundation for Defense of Democracies (FDD).

These figures are affirmed by regional data. Last year, Russian authorities documented about 100 cases where virtual money was used to finance illegal activities. In the meantime, Japan recorded only 699 cases of suspicious financial activity related to digital currencies out of 370,000 reports submitted to the National Police in 2017.

Nonetheless, Russian authorities strongly believe that cryptocurrencies pose a serious threat by creating pleasurable conditions for tax evasion and various illegal schemes. The views expressed by Bortnikov are in sync with the position of Russian President Vladimir Putin, who started last year that cryptocurrencies pose risks such as “laundering the capital obtained by criminal methods, avoiding taxes and financing even terrorism, and, of course, the spread of fraudulent schemes that can affect ordinary citizens.”