European Parliament study shows that cryptocurrencies are little used to finance terrorism

According to an investigation carried out by the European Parliament (EP) to investigate the use of cryptocurrencies to finance terrorist activities, there is hardly a small number of public documents and confirmed cases of financing of terrorism that involve cryptocurrency.

The study, completed last May and published on the European Parliament website, was conducted by a team led by the Policy Department for Citizens' Rights and Constitutional Affairs, which concluded that digital currencies do not currently offer terrorism advantages superior to those presented by other financing methods that are used today, such as fiat money.

In the investigation, the parliamentarians carried out an analysis of the risks associated with cryptocurrencies and explored the current state and the dangers of their future use by global terrorist networks, in addition to analyzing the regulations that are being applied in different countries, in order to offer a series of recommendations to the European Union.

In this regard, parliamentarians point out that the records indicate that -although in low volume and in an unsystematic way- religious and political extremists have used cryptocurrency most for criminal purposes, so in the short term they see little danger of growth of this type of activity.

In this regard, explain that among the ways of using virtual currencies for criminal actions that have been registered, are the fundraising in social networks and decentralized platforms, the transfer of funds and securities between terrorist networks using p2p exchanges, and the supply of articles in the Dark Web.

However, European parliamentarians are anticipating a long-term advance in the use of cryptographic currencies in these fields that operate outside the law, due to the development of private cryptocurrencies (due to their anonymity) and to a more massive adoption of innovations linked to social networks and online platforms; all this coupled with a possible convergence of terrorism with cybercrime, as indicated in the investigation.

These results coincide to a large extent with a study carried out in 2017 by the School of Law of the University of New York, on the terrorist use of virtual currencies, which also concludes that terrorist groups use small-scale cryptocurrencies, mainly because they operate in areas with a poor technological infrastructure and limited access to telecommunications, although the risks of this situation changing in the future due to the massification of innovations are not ruled out.