Crypto-financed terror attacks probably quadrupled in the past few years, according to a United Nations official interviewed by Bloomberg.
Svetlana Martynova, a senior legal officer at the United Nations Counter-Terrorism Committee Executive Directorate, said that a couple of years ago 5% of terrorist attacks were viewed as crypto-financed or linked to digital assets. “Now we’re thinking that it may reach about 20%," she said.
Martynova also spoke on the financing of terror at a United Nations Security Council meeting at the Hotel Taj Mahal Palace, Mumbai, one of the sites of a Nov. 26, 2008 attack that left 175 people dead and more than 300 wounded.
"With regards to moving funds, experts agree that cash and other time transfers remain the prevalent methods used by terrorists," she said in the address. But "there was also an increase in their use in combination with new payment methods."
Those new methods include mobile payment systems and virtual assets, she said. "Blockchains, cryptocurrencies and crowdfunding sometimes pose a complex money trail for financial investigators to follow. Some of these products can enable anonymous cross-border funds transfers."
Martynova warned against blanket-type prohibitions. She said it is critical to understand "the exact nature of the threat" to develop appropriate responses, which should be "risk-based, outcome-based, proportional and human-rights law compliant."
Crypto crime accounted for a record $14 billion worth of blockchain transactions last year, almost double the 2020 figure of $7.8 billion, according to blockchain research firm Chainalysis.
The UN recommends following the guidelines and policies of the Financial Action Task Force (FATF), the global standard setter that initiates anti-money laundering (AML) policies for Group of 7 industrialized nations and an additional 30 or so developed countries to combat money laundering and terrorism financing.
The FATF has said authorities need to fast-track checks on crypto users’ identities and that only 11 of 98 surveyed jurisdictions are enforcing and supervising the controversial measure known as the “travel rule,” which requires Virtual Asset Service Providers (VASPs) to communicate the information of the originators and beneficiaries of crypto transactions that exceed a certain threshold.
