The rise of Bitcoin and other cryptocurrencies poses new challenges for the fight against money laundering and terrorist financing (AML/CFT). Cryptocurrencies provide their users with the opportunity to make global payments that are beyond the control of financial regulators and security authorities. In addition, there is a growing risk that terrorist financiers may evade state surveillance and tap into new sources of funding.
Recent evidence demonstrates that terrorist groups and their supporters have become increasingly familiar with the new technology. Terrorists use it to launder money or try to find new sources of finance, as a number of recent examples of fundraising by terrorist groups illustrate. We are still at an early stage of the development of this new threat, but the technical capabilities and capacities of terrorist groups close to ISIS or Hamas, for example, are progressing rapidly. For example, there have been several reported cases of terrorist groups using automatic address-generating software for cryptocurrency wallets to call for donations. None of these new addresses, which have not yet received payments, can be found on the blockchain.