Crypto Terror Financing Crackdown Urged by Cyprus

YEREVAN (CoinChapter.com) — The Institute of Certified Public Accountants of Cyprus (ICPAC) has issued an urgent alert. They are calling on accounting and audit professionals to help detect and prevent crypto terror financing.

Cyprus Regulatory Alert on Terror Financing. Source: Institute of Certified Public Accountants of Cyprus (ICPAC) Accountants Play Key Role in Combating Terror Financing, Says ICPAC

Financial crimes like money laundering and terror financing are typically handled by law enforcement. However, ICPAC emphasizes the importance of accountants and auditors in this fight. They issued a “terror financing alert” to highlight their role. Accountants and auditors must participate actively in prevention. Their vigilance can help identify suspicious activities early.

Five Methods of Terror Financing: Including Cryptocurrencies

Terrorist organizations use five main methods to transfer funds:

  • Donations via nongovernmental organizations (NGOs)

  • Cash transactions

  • Bank transfers and gift cards

  • Cryptocurrencies

  • Shell companies

Cryptocurrencies have gained significant attention. ICPAC urges accounting professionals to monitor anonymous cross-border peer-to-peer transfers, crowdfunding, and online fundraising campaigns. These channels can be exploited for illicit purposes.

The directive from ICPAC is clear. Accounting professionals must be vigilant about cryptocurrency transactions to combat crypto terror financing. They need to report suspicious activities. Failing to do so will be considered an offense. This involves active scrutiny, profiling individuals, screening crypto wallets, and using specialized blockchain tools.

Cyprus regulator’s recommendation for investigating suspicious crypto transfers. Source: icpac.org.cy Treasury Confirms Limited Use of Crypto by Palestinian Militants

A United States Treasury official stated that Palestinian militant groups, including Hamas, used small amounts of cryptocurrencies to fund terrorist activities. However, they still preferred traditional products and services for most transactions.

Treasury Confirms WSJ Report Inaccuracies on Hamas Crypto Use. Source: Tom Emmer

Palestinian Islamic Jihad raised $12 million through crypto fundraising, confirmed by blockchain analytics firm Elliptic. This finding contradicted a Wall Street Journal report, which initially claimed the group raised $93 million and $41 million between August 2021 and June 2023. Elliptic stated there was “no evidence to suggest that crypto fundraising has raised anything close to this amount,” leading the Journal to correct its findings.

Representative Tom Emmer asked the Treasury’s Undersecretary for Terrorism and Financial Intelligence, Brian Nelson,

“Hamas is using crypto in relatively small amounts compared to what’s been widely reported, that’s correct?”

Nelson responded,

“That’s our assessment, yep.”

ICPAC has directed its members and compliance officers to report any suspicious crypto transactions. The scrutiny process will involve detailed profiling and screening. Specialized blockchain tools will be used to ensure thorough checks.

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