Chainalysis Highlights Flawed Analysis in Assessing Crypto's Role in Terror Financing
Blockchain analytics firm Chainalysis has raised concerns over the accuracy of recent reports regarding the extent of cryptocurrency's role in terrorist financing.
Following the recent Hamas attack in Israel, there has been increased scrutiny of how terrorist groups might be utilizing cryptocurrency for their funding.
Chainalysis acknowledges that while terrorism financing constitutes a small portion of the already limited illicit cryptocurrency transaction volume, some terrorist organizations s do raise, store, and transfer funds using digital assets.
The firm points out that traditional, fiat-based methods such as financial institutions, hawalas, and shell companies remain the primary means of financing for terrorist organizations.
In light of recent events, various media outlets have attempted to estimate the extent of illicit cryptocurrency funds that may have been channeled into the Hamas offensive.
Senator Elizabeth Warren, along with other lawmakers, has called for answers from the Biden administration in response to a Wall Street Journal report on Hamas's alleged use of cryptocurrency.
Chainalysis outlines two critical aspects of analyzing the flow of terrorism-related funds: quantifying funds directly in the possession of a terrorist organization and identifying the service providers facilitating the movement of funds tied to terror financing.
The firm raises concerns that recent estimates concerning the Israel attacks may have included all flows to certain service providers, even if they received some funds associated with terrorism financing. In such cases, the reported totals might encompass funds unrelated to terrorism financing.
For example, Chainalysis mentions that although it might seem like $82 million in
Read more on cryptonews.com
