The number of Bitcoin transactions that terrorists conduct is below 0.05% of the total. Despite the high returns that the cryptocurrency can generate, terrorist groups seem not to be very interested in it.

A recent study indicates that some terrorist groups have reserves in cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), to finance their activities. However, the transactions with BTC that those groups make only represent less than 0.05% of the total coins traded.

The Coinbase research team, which Heidi Wilder led, published the results on the platform’s blog. For the analysis of the information, they relied on data from Coinbase Analytics. That section of Coinbase focuses on the collection and analysis of data from the blockchains of different cryptocurrencies.

The platform has allowed the flow of funds from different public addresses that supposedly belong to terrorist groups.

Some Terrorist Groups Use Bitcoin and Other Cryptocurrencies

The analysis made it possible to determine that four terrorist groups owned cryptocurrencies as part of their financing methods. They are Al Qaeda, Hamas, ISIS, and the Jihadist Activist Movement that Saudi Arabia leads. A graph from Coinbase indicates that a fifth group identifies the BTC and other cryptocurrencies that Al Qaeda trades.

That last group, known as Hamas, has the most coins, with almost USD 1 million worth of Bitcoin. However, the study indicates that the amount is related to donations directly in BTC that they request through their website.

The study showed that Hamas increased its collection volumes during periods of high turmoil in the Palestinian territory, where it operates.

The Extent to Which Bitcoin Helps Terrorists Finance their Activities

Although the amounts mentioned above seem very large, data from the study reveal that it is only a tiny fraction of the total that these groups mobilize. In that case, less than 1% of Bitcoin transactions correspond to illegal activities, of which 0.05% have to do with terrorism financing.

An analysis by the esglobal website determined that Daesh and Al Qaeda had annual revenues of USD 2 billion and USD 250 million, respectively, in 2016. They acquired those amounts through different activities such as drug trafficking and the illegal sale of oil.

A report that Chainalysis published in May mentioned that collection campaigns through cryptocurrencies do not exceed USD 10,000. That represents a tiny fraction of income compared to that of other activities. That study concluded that there was no direct relationship between Bitcoin and the support for terrorist activities.

In 2017, a prestigious UK think-tank analyzed the alleged relationship between Bitcoin and terrorist groups. Their study revealed that there is not a connection as strong as many regulators assume.

The use of Bitcoin and other cryptocurrencies in the world economy is increasingly significant, which does not go unnoticed by regulators. The authorities of many countries have those crypto assets in their sights because they directly link them to money laundering and terrorism financing. For that reason, they tighten the regulations on their use and even prohibit them within their territories.

By Willmen Blanco

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