22 October 2019

Turkey’s offensive in Syria, terrorism and cryptocurrency

Monitorul Apărării şi Securităţii

Despite the opportunities offered by cryptocurrencies’ trading, their use by terrorist organizations or groups is still limited. Even if there are no clear official proofs, according to some European Parliament and Europol reports, the cryptocurrency is, now, just a small part of the money received, managed and spent by terrorist organizations. This whole situation created by the Turkish offensive in Northern Syria, along with the “funds hunger” of the Islamic State from Iraq and Levant terrorist organization makes us think that the organization will try to exploit the cryptocurrency funding method better.

Image source: Mediafax

Temporary opportunities

On October 9th 2019, Turkey launched a trans-border operation in North-East Syria through air attacks, artillery bombardments and, the following day, it also started the land phase of the operation against the Kurdish positions. Turkey’s action provoked different immediate reactions from the international community. Meanwhile UN asked for “maximum constraint”, the protection of UN Charter and the humanitarian international right, NATO, through the general secretary, has demanded Turkey to act “moderately”, proportionally and limitedly, also admitting that Ankara has some “legitimate security problems”.  

The Russian president, Vladimir Putin, but also EU officials have stated that Turkey’s intervention may led to long-term instability in North-East Syria and the evasion of ISIL fighters captured by the Kurds, offering the opportunity for terrorist groups to re-emerge. These last statements were made after the Syrian Democratic Forces (SDF), mostly Kurdish, have announced that part of the effectives dedicate to ensuring security for the camps wherein ISIL fighters are being held were re-dislocated to the North border.

Therefore, it emerges the question: who will ensure the security of ISIL prisoners’ camps? The answer comes from the American president, Donald Trump, in a tweet wherein he states that Turkey should take this responsibility as part of the air-land offensive launched in Syria.

A peaceful handoff of the refugees and the ISIL members’ camps to the Turkish army is less likely to happen. Given that the handoff may be done through using force, the threat is all the more increased as some of the young men who are in the refugees’ camp were radicalized and went on ISIL’s side. This was possible also due to the fact that the detention and the refugees’ camps stay under really precarious life conditions. According to an American official, their evasion or liberation will complicate the surveillance or identification of the radicalized people, who are “true bombs”.

Even if ISIL lost the control over the big cities in Iraq or Syria, the leadership of the terrorist group proved to be resilient and has permanently adapted to the strategic or operative-tactical changes.

The opportunity received by the Turkish offensive can, therefore, provide the necessary human resource to the re-emergence of ISIL. ISIL’s priority is, now, providing the necessary funds to keep the human resource and the execution of large-scale attacks. One of the methods would involve the cryptocurrency.

Cryptocurrency and terrorism funding

Syria was both a laboratory and an incubatory for each innovation of the “global jihad” supporters: recruitment and propaganda- using social media, offering inspiration models for the “lonely wolfs” and, recently, funding.

The technological innovation and progress have helped the terrorist organizations to develop an entire series of actions, from recruitment to attacks. The recent popularity of bitcoins, as possible replacement of conventional coins, the easiness of their online use, as well as transactions’ versatility, have raised the interest of terrorist organizations. There are many organizations who have thought of using bitcoin, the feasibility of the involved steps for a bank transfer, but also on the pro and against elements of using Bitcoins, Ethereum, Monero, XRP, BlackCoin, Dash, ShadowCash and Zcash.

The terrorist organizations could use the cryptocurrency in two ways: 1. The money transfer between group or organization’s cells: 2. Receiving “donations”. The lack of rigorous registering mechanism when creating an account makes it more attractive for terrorist organizations. Tying this system with the social media, we can state that the fund raising becomes easier, increasing the number of possible “donors” or moral and financial supporters of the terrorist organization.

In 2016, ISIL and al-Qaida fighters were asking for cryptocurrency donations on social media. Before that, in 2015, the ISIL members were asking for this type of currency, although the ISIL leadership and other terrorist groups were not ok with this type of funding. In 2017, ISIL was already receiving cryptocurrency donations from all over the world, many of them coming from US. Currently, the cryptocurrency funding demands can be found on the online groups connected to ISIL from the “Telegram” application. According to the Israeli company “Whitestream”, the Sri Lanka attack from April was financially supported through Bitcoin.

In South-East Asia (Indonesia) the funds received through cryptocurrency are still limited. According to “Cryptocompare”, the Indonesian bitcoin trading to rupee was overcame 29 billion rupee or 335 bitcoins per day. However, Oscar Darmawan, the executive director of “Bitcoin Indonesia” platform, stated that “only one or two terrorists have tried to use bitcoin and the transactions are carefully surveilled”. In Germany, the police is investigating a bitcoin transfer made on the right-extremist’s account who is behind the terrorist attack from the beginning of October, in Halle. According to a German newspaper, a 0,1 bitcoin transfer- around 750 euro (660 pounds)- made by an unknown source, was made towards the possible attacker.

Cryptocurrencies are still interesting for the terrorist organizations, thus there are some disadvantages for the users

In a report published on May 14th of 2018, by the European Parliament, it was being stated that “there are still only a small number of publicly-documented and confirmed cases of TF involving VCs”. The same thing was supported by a report published by Europol, in 2018: “None of the attacks in Europe seems to have been funded through cryptocurrency. Their use by terrorist groups has only involved small transactions”.

One of the reasons which led to these evaluations is the lack of technical infrastructure and feasible telecommunication in many of the countries the terrorist groups interested in such transactions are working in. Until now, the necessity to avoid the law enforcement institutions and to maintain their actions’ anonymity, has pushed the global terrorist organizations and the regional groups to mainly use cash funds, detrimental to bitcoins, through couriers, the traditional hawala banking system, prepaid credit cards and the legal bank transfer systems.

Another reason is that some terrorist organization think that training and involving some members in the bitcoins transactions, under anonymity, is a human and financial resource loss.

A third reason would be that, at least in the areas they deploy actions in, the use and acceptance of bitcoins is limited. It is difficult change the online funds to cash, in a conflict area, and then to pay for the services or equipment necessary to planning and executing attacks or guerilla actions. A fourth reason would be the unstable value of cryptocurrency, which would determine some financial loses or winnings for the terrorist organizations. But, in the end, the one who does not take the risk, does not win.

Finally, a last reason would be that the transactions should have small values, undetectable and that would keep transfer’s anonymity.  Big transactions could raise suspicions within the banking and law enforcement institutions and would lead to the dissolution of some funding networks, which could be a disadvantage for the terrorist organizations. Despite these disadvantages, some groups managed to overcome them. For example, Hay’at Tahrir al-Sham (HTS), one of the terrorist groups that deploys actions in Syria, has received around $ 1.600 in cryptocurrency, using nine “Bitcoin wallets”. Even the exchange of bitcoins in cash is no longer an issue. Different groups from Syria have changed the cryptocurrencies to cash by integrating the digital technology with hawala.

Unanswered questions. For now…

Given all these arguments, lacking of concrete proofs, as stated in the Europol and the European Parliament report, we cannot estimate how many such transactions are being developed by the global or regional terrorist groups or organizations or which is the total value of the money offered to such organizations through cryptocurrency.

The Sri Lanka attack can be one of the examples. But how many similar case were exactly and how many will be in the future? Will the situation created for ISIL by the Turkish offensive in North of Syria determine the organization to use the cryptocurrency transaction more often?

Translated by Andreea Soare