Bitcoin hits the news related to ISIS
There were two Bitcoin stories today in the US media with an ISIS connection, raising alarm bells regarding the potential use of digital currencies for terrorist financing.
The first story was that a teenager in Virginia had been arrested by the FBI for allegedly facilitating a person to travel to Syria to join the Islamic State. According to BuzzFeed.com, the teenager wrote for a Bitcoin newspaper called “CoinBrief†and covered virtual currency news developments. The teenager apparently also operated a Bitcoin exchange that sold Bitcoin.
His sympathetic leanings in respect of ISIS may have been predicted – in 2013, according to BuzzFeed, the teenager wrote an article lauding the practice of human slavery as a “peaceful†way of integrating “belligerent†women and children into society as opposed to “killing themâ€, whereby (according to the teenager], non-Muslims would learn to accept Muslim culture.
Bitcoin via Twitter Tips
The second story is surreal and I only learned of it from a chief compliance office at a major US bank, a fact that should indicate the concern among global banks over how companies in the Bitcoin space continue to miss cues on serious financial crime concerns.
This story involves the use of a Bitcoin tipping service that was allegedly used for terrorist financing. A person allegedly used the tipping service to send $1 via Twitter to another person whom the sender believed was a member of ISIS. According to the story, it appears that the sender deliberately and knowingly completed a financial transaction over the Internet to engage in terrorist financing to benefit ISIS as a test. Later, the sender is alleged to have commented that he was not yet “in jail.”
The article then goes on to quote a spokesperson from the tipping company commenting about freedom of speech, the relevance in law of which is unclear. Sending Bitcoin via Twitter, regardless of the mechanism, is not an exercise of freedom of speech – it is a financial transaction.