End of Week Recap - Oct. 22^nd

Top News Headlines

• The ‘Next Wave’ Is Coming—Bitcoin Breaks $30,000 As $15.6 Trillion Wall Street Flood That Will ‘Dwarf’ The Last Crypto Bull Run Is Revealed - Read More

• Sam Bankman-Fried FTX trial moves to final stages - Read More

• New York Sues Winklevoss’ Gemini And Silbert’s DCG Alleging $1 Billion Crypto Fraud Scheme - Read More

• How The Bitcoin ETF Approval (Or Not) Process Works At The SEC - Read More

Top Crypto Prices by Market Cap.

Source: Coingecko Price Feed, Oct. 22^nd 2023, 8:25pm EST. Data excludes Lido Staked Ether, and stablecoins USDC and USDT.

Spotlight: The Truth About Crypto and Terror Financing

There have been many misleading reports over the last week claiming that tens of millions of dollars in crypto have been funding recent terror operations in the Middle East. However, leading blockchain analytics firm Chainalysis said in a recent blog post these metrics were “overstated” and based on “flawed analyzes”.

So what is the real role of crypto in terror financing?

On Wednesday, Oct. 15th, U.S. Sen. Elizabeth Warren (D-Mass.) led more than a hundred lawmakers in demanding top officials share their plans for heading off crypto-financed terrorism.

The bipartisan group of lawmakers from both the Senate and the House of Representatives signed a letter dated on Tuesday to National Security Advisor Jake Sullivan and Brian Nelson, undersecretary for terrorism and financial Intelligence at the Department of the Treasury. They cited reports that crypto funds had supported Hamas in the months before its attack on Israel, with the group directly soliciting bitcoin donations.

Are Lawmaker Concerns Valid?

There is no doubt that funds raised by terrorist organizations – no matter how small – are significant and should be investigated and stopped by any means necessary.

According to Chainalysis, although terrorism financing is a very small portion of the already very small portion of crypto transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency.

Terrorist organizations have historically used and will likely continue to use traditional, fiat-based methods such as financial institutions, hawalas, and shell companies as their primary financing vehicles.

How Hamas' Crypto Fundraising Backfired

Since the extremist group first began soliciting bitcoin donations in 2019, that haven has become a hell. How?

Hamas learned the hard way what so many criminals have learned before: sending money over the most advanced, transparent payment system ever invented makes it nearly impossible to conceal illegal behavior. Digital footprints left on the blockchain can be used by forensic experts to expose networks of financiers, provide evidence for law enforcement, and create an avenue for authorities to divert funds originally directed towards illicit causes.

Hamas knows this now. That’s why it abandoned bitcoin altogether in April of this year.

Working Together to Fight Terrorism Financing on the Blockchain

Given blockchain technology’s inherent transparency and the often public nature of terrorism financing campaigns, cryptocurrency is not an effective solution to finance terrorism at scale.

However, even small amounts of funds sent to terrorists can do tremendous damage. When investigating small inflows of funds to terrorism campaigns, law enforcement and intelligence agencies can leverage blockchain analysis to investigate donors, facilitators, and cash out points and partner with private sector organizations to shut down activity.  

In summary, crypto is microscopic drop in the bucket compared to the amounts terrorist organizations still receive from traditional means of financing like plain old USD cash.

That’s it for the End of Week Recap by DAI! If you found this useful, please share and recommend! Thanks for reading!