President Biden and a TRM Labs executive have called for greater regulatory cooperation when it comes to illicit financing.

The international terrorist organization ISIS uses a non-expendable token to promote propaganda about events occurring in Afghanistan.

Through a series of tweets and other means, an ISIS supporter created an NFT of events in Afghanistan and used the information from that NFT to build other NFTs. This is the first time that a terrorist organization has used decentralized Web 3D methods to spread information.

Previously, propaganda was posted on social media platforms like Twitter and Facebook, making it easy to take down. By migrating to Web 3.0, terrorist organizations ensure that their propaganda machine never shuts down.

According to a research paper from the University of Texas at Austin, exploitation of Web 3.0 by extremist organizations is relatively low.

However, new decentralized technologies are still on their radar, given the propensity of such groups to exploit new technologies. While content moderation strategies differ from social media, they do exist and can be used to remove harmful content.

Global Coordination Needed, Says Executive

Regarding terrorist financing and money laundering, Ari Redbord of TRM Labs said it is important for the US Department of Justice and Treasury to develop global partnerships to eradicate illicit financing.

The Monetary Authority of Singapore, authorities in the United Arab Emirates, the United States, the European Union, and the United Kingdom are doing encouraging work in this area, but more international cooperation is needed, Redbord said.

In President Joe Biden’s Cryptocurrency Executive Order issued on March 9, 2022, various executive branches of the United States government were tasked with designing crypto regulations that consider environmental aspects, consumer protection, and law enforcement, in other aspects.

The Treasury Department and the Justice Department have returned with reports so far. The DOJ still needs to describe how it will continue its work with its international counterparts.

In the executive order, Biden said international cooperation is important to maintain high standards of consistency regarding anti-money laundering and anti-terrorist financing laws as criminals exploit regulatory arbitrage.

He also emphasized the importance of mitigating the risks of illicit finance, where digital assets can be used to circumvent the US and international sanctions. He said criminals often collect cybercrime proceeds in digital assets in countries where Financial Action Task Force guidelines have not been followed effectively.

Is Targeting Illicit Financing going to stop the Spread of Information?

Could laws designed to curb illicit finance address the spread of propaganda on a censorship-resistant decentralized network? The Treasury Department recently sanctioned a cryptocurrency mixer, Tornado Cash, in a ruling that sparked protests regarding the status of computer code as a form of “free speech that was being censored.”

It should be remembered that, according to a statement by the Under Secretary of the Treasury for Terrorism and Financial Intelligence, the mixer Tornado Cash had failed to impose effective anti-money laundering practices to prevent illicit fund flows. In addition, it also failed to implement basic risk management protocols. While most cryptocurrency transactions are legal, mixers provide a fertile playground for sanctions evasion, as do peer-to-peer exchanges and darknet marketplaces. Ransomware, heists, and other crimes are also perpetrated through these channels.

As Congress resumes after a three-month recess, it will have to vote on about 50 bills, including the recent Lummis-Gillibrand bill.

By Audy Castaneda


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