Terrorism financiers are exploring the use of virtual currencies such as bitcoin to fund their operations as authorities crack down on the flow of illicit money through more traditional channels, the U.S. Treasury Department said.
"Terrorist groups may use these new payment systems to transfer funds collected in the United States to terrorist groups and their supporters," the Treasury said in a report released Friday. The department cited as an example a blog post linked to Islamic State that proposed using bitcoin to fund global jihadist efforts.
Almost 14 years after the Sept. 11 attacks, the government has made it harder for terrorists to use the U.S. and international banking system. So groups such as Islamic State are reaching for new payment methods that offer anonymity and using social media to raise funds, the Treasury said in the National Terrorist Financing Risk Assessment, released Friday in Washington.
"The growth of online communication networks, including social media, has opened up new avenues for terrorists and their supporters to solicit directly, and receive funds from, U.S. residents," the Treasury said.
The report, the first attempt by the Treasury to provide a comprehensive summary of terrorist financing methods and risks to the U.S. financial system and national security, also points to terrorist groups posing as charities to solicit donations, according to the report.
"A notable trend in this sector has seen individuals unaffiliated with any charitable organization recognized by the U.S. government raise funds for terrorist organizations under the auspices of charity, with outreach through social media playing a key role," the report stated.
Thats playing out in countries where fighting continues, it said.
"The Syrian conflict has seen a significant use of the Internet and social media sites, such as Twitter and Facebook, to solicit sizable donations that include support to designated terrorist organizations and their supporters," according to the report. "A number of online fundraisers explicitly advertise that collected funds are being used to purchase weapons and other equipment for extremist groups and post videos and photos verifying the receipt of donations by fighters."