Analysis: The Rise of Bitcoin and Cyber-Terrorists

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Pile of cryptocurrencies
Terrorists are always developing new ways of attacking their targets and raising funds for their global operations keeping every step hidden.

The dark web is a fragment of the internet hosting mammoth numbers of domains that disguise the IP addresses of their host servers. The identity of the users and the brains behind the sites are almost impossible to tell.

Cyber-terrorism, which is best defined as the propagation of terror and extremism on the internet by terror groups such as ISIS, is equally active on the dark web.

With the reasonably high degrees of anonymity that the dark web boasts of, it is not surprising to witness the infiltration of individuals with terrorist ideologies on the dark web. They raise money through virtual currencies.

Law enforcement agencies have also surreptitiously penetrated into the dark web in pursuit of perpetrators. There has been substantial evidence laying claim that ISIS and terrorist groups that share its ideologies are soliciting the anonymity in the dark web to amplify their agenda and undertakings globally.

The reports cannot be downplayed as downright hearsay or propaganda. Law enforcement agencies globally are faced with an uphill task to essentially track and hunt down the cyber-terrorists operating on the dark web.

Is Bitcoin a Tool for Funding Terrorist Groups?

The cryptocurrency Bitcoin has risen in stakes and its popularity has soared amongst terror groups, using digital wallets for their transactions, mostly in Bitcoins.

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They mostly prefer Bitcoins because they evade taxes to the Western countries and/or other nations where their ideologies are generally not well accepted. They are also able to avoid legal exposure and prosecution.

Cryptocurrency transfers rely on a decentralized system. Despite the young age of cryptocurrencies, the advancements in technology are causing a disruption in the financial sector.

This upset has the capability to precede new markets, beget more financial transparency, as well as provide populations with limited exposure to banking services with more access to capital.

A 2017 advanced crackdown on ISIS was thought to be a breakthrough in the hope that its operations would be crippled. In a twist of events, towards the end of 2017, the group had revamped and the site spreading their agenda kick-started an online drive to raise funds.

A link was affixed to publications on the site, with calls for donations in the form of Bitcoin. Reports by Israeli newspaper Haaretz established that the link directed to a donations-devoted site. The site was located on a page in a forum that dealt with the dealings of Bitcoins by the name CoinGate. Later law enforcement-initiated probes into the link did not lead to the forum.

This was a clear statement of the terrorist group’s emphasis on avoiding being tracked. The online drives to raise funds in Bitcoins have increased foothold on groups sharing terrorist ideologies.

Bitcoin transactions are recorded openly in a digital accounting entry called blockchain.

In Telegram, which is popular among ISIS members, a new Bitcoin address affiliated a terrorist group brought to light a succession of transactions from July 2016 to January 2017 with some accounts averaging almost $300,000 in transfers on the blockchain.

Hacker sitting on PC
Cyber-terrorists have been known to use social media platforms such YouTube and Facebook to recruit willing members.

Cash that has absolutely no trail is their most favored funds-transmitting medium.

The emergence of new activities online may seem to suggest that these terrorist groups are supplicating Bitcoins. These are in turn spent without the aid of any intermediary.

Since terrorist networks are not in a position to carry out transactions freely in the formal banking setup, they often come up with underhand methods to acquire resources. Some media outlets sharing the terrorist groups’ ideologies have been quoted urging supporters to contribute funds to explicit Bitcoin addresses.

There have also been incidences where they solicit a contribution for the purported maintenance of their sites by also targeting sympathizers in Western countries. Some of these fundraisers have attracted little attention in the recent past with some donations being as low as $100.

In the past, it has been reported that the terrorist groups have carried out their operations through the use of Bitcoins. Some of these operations include terror attacks—for example, the 2015 Charlie Hebdo attacks in Paris, which was reportedly funded through Bitcoins from the terrorist group al Qaeda in the Arabia Gulf.

The November 2015 attack in Paris was also reported to have been funded from a colossal digital wallet with vast amounts of Bitcoins.

Others include online fundraisers receiving donations in Bitcoins meant to procure firearms, ammunition, and explosives.

Growing attention on the Bitcoin-sourced funding of terrorist groups’ media outlets is substantial. This pinpoints to them having possibly identified influential usage of cryptocurrencies in their targets and resolutions, the entrenchment of their propaganda and the organization of their activities.

Most of their dedicated web pages can only be accessed through the aid of the Tor browser. In addition, according to the Terrorism Research and Analysis Consortium (TRAC), the terrorist groups mostly use Telegram to propagate their propaganda and other media, such as videos, in a bid to experiment on new ways to further expand their financial support using Bitcoin.

Cyber-Terrorists Have Sought Refuge in the Dark Web

The current crisis globally is on how to fight increasing extremist activities brought about by terror groups such as ISIS. Capitalizing on the increasing growth of ISIS among other terror groups is now increasingly shifting the battle to online cyberwar.

This is by use of online messages and videos, the dark web and applications with the aim of radicalizing more people to becoming a new generation of cyber-terrorists.

The dark web, particularly in the modern days, has become a tool helping ISIS to spread their ideology and propaganda to online sympathizers across the globe.

Social Media Also Used as Recruitment Platform

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According to Wulkan, the online fundraising drive on the ISIS website was tracked down.

Cyber-terrorists have been known to use social media platforms such YouTube and Facebook to recruit willing members.

One particular study published last year analyzed over 50 different Twitter user accounts and over 100 Facebook pages which generated over 2,050 results helped confirm the hypothesis.

It found that online hate is being used by extremist groups like ISIS for propaganda and recruitment initiatives.

This is being done through online videos being filmed and streamed professionally impressionable and young people. ISIS members are beginning to show the organization’s capability to form a global cyber-terrorism movement.

The dark web is also becoming the virtual playground for extremist views acting as an echochamber.

According to a Tel Aviv security analyst working for Singapore-based cybersecurity firm, there is concrete evidence that ISIS is making uses of highly anonymous networks on the dark web for radicalizing, recruiting and fundraising.

Concerns have also been tabled that the known ISIS and ISIL groups are making use of Bitcoin and other digital currencies that enable anonymous transactions and money laundering.

The Singapore-based cybersecurity firm uncovered evidence, where a terror cell thought to be connected to ISIS and operating in America, is requesting for Bitcoin in its fundraising effort.

Recently, as reported by James Scott of the Institute for Critical Infrastructure Technology, ISIS has been operating a 24-7 cyber helpdesk completely staffed with about six dark web operatives who are highly qualified from across the globe as consultants on how to send encrypted messages and strategize how to carry out cyber attacks.

Such evidence is being exposed to the public linking what claims to be ISIS cell fundraising using Bitcoins in the darknet, according to Ido Wulkan, a senior web-intelligence analyst at S2T, a Singapore company that develops data and cyber intelligence solutions for governments and corporations. The fundraising effort may indicate a worrying trend in the fight against terror, Wulkan said.

Due to the continued effort and cooperation between law enforcers and owners of social media platforms to delete ISIS-affiliated accounts, it is now almost obvious that ISIS global cyber-terrorists have sought refuge in the dark web, Wulkan added.

In June 2014, the government of Iraq blocked access to Twitter and Facebook. This was partly in reaction to the growing threat of the ISIS.

As seen in metrics on Tor data, the move led to an explosion in Tor usage in the country.

According to Wulkan, the online fundraising drive on the ISIS website was tracked down. This was done through a sealed referral forum in Turkey which has hackers as the users and has been associated with other extremist sites that are well known.

As part of the project, Wulkan used S2T’s GoldenSpear, a data recovery system, to obtain and analyze data.

A pro-ISIS gathering, according to a report from the Meir Amit Intelligence and Terrorism Information Center, started a campaign last year with the agenda of soliciting for funds on the dark web with the caution not to leave any traceable trail.

This was after an article titled “Bitcoin and the Charity of Violent Physical Struggle” circulated online arguing that in order for ISIS to fund its terror operations, it needed to go outside the Western financial. The article was posted to a page on the dark web that provided a Bitcoin address through which funds could apparently be sent directly to the ISIS.

The crackdown on the ISIS-affiliated Bitcoin users has been fruitful in the recent past. Last December, 27-year-old Long Island resident named Zoobia Shahnaz was charged with fraud and money laundering to support terrorists.

She is reported to have moved around $85,000 worth of Bitcoin and other digital currencies. This was allegedly meant to be in solidarity with ISIS.

A few years ago, a teenage Twitter user in Virginia also pleaded guilty to charges of using the platform to teach others on the process of using Bitcoins, most of whom were ISIL followers.

What Ought to Be Done?

Huge amount of cryptocurrencies.
Cryptocurrencies have become widespread and they are receiving more coverage on conventional media.

Cryptocurrencies have become widespread and they are receiving more coverage on conventional media.

By keeping up with technological advancements, terrorist groups are well in light of the full potential that the new digital currencies possess, especially on a fundraising front.

The crackdown on Bitcoins by the law enforcement agencies is proving to be relatively trivial.

The terrorist groups could be feeling the threat of having their habitat being encroached and may eventually start experimentation on other newer cryptocurrencies that will prove lesser traceable and provide room for more anonymity.

The use of exchange services online has users of various cryptocurrencies dependent on third-party businesses. The dependency may render the users vulnerable to account suspension and the risk of being reported to law enforcement agencies. This may force the terrorist groups to adapt and minimize their use of similar platforms.

There is still the probability of online transactions being the preferred location for donations to terror affiliations by those who are tech-savvy and to whom security is of less importance.

There is still hope in the sense that Bitcoin is still not such a secure source of funding for the terror networks. Widespread use of cryptocurrency is still limited despite advanced public awareness. Little infrastructure for people to use Bitcoins on actual goods and services are some of the factors seem to discourage the terrorists, despite being outwardly informed.

Law enforcement authorities should adopt counterterrorism measures to conceive the paradigm shift leading to the funding of terrorism via cryptocurrency becoming a major threat and head off the possible threat. Some may include targeting recruiting persons with skills in computer science.

They should be on the lookout for changes in the cryptocurrency world, such as the adoption of more sophisticated and anonymous currencies and the growth of digital currency exchanges not adherent on anti-money laundering and/or know-your-customer (KYC) procedures.

Terrorists have been testing Bitcoin funding models for quite some time, despite the cryptocurrency field being in the juvenile phases of development, usage and reception.

The public needs to create more awareness in spite of some notable crackdowns on terrorist activities. Tech leaders and stakeholders ought to do more and especially with the industry still evolving, terrorists will try and tap into the evolution.



With the urge to know more about everything around us, I am an enthusiast researcher and writer with keen interest in expanding my knowledge in a bid to be well versed. Through writing, I express and share my feelings, ideas, and thoughts for like minded individuals.
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