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Technology-Savvy Terrorist Groups Seen Embracing Cryptocurrency | Bloomberg Government – Bloomberg Government


U.S. officials are worried about an increase in cryptocurrency use by terrorist organizations as the technology becomes easier to handle.

Groups are in a “nascent stage” with digital money but are increasingly using it for fundraising, said Stephanie Dobitsch, deputy undersecretary in the Department of Homeland Security’s Office of Intelligence and Analysis.

“The concern for us is that as the technology advances and becomes more user-friendly, that we’re going to see more activity,” she told lawmakers Thursday during a hearing before the House Homeland Security Intelligence & Counterterrorism Subcommittee.

Cryptocurrency can be difficult to track, making it a popular tool for money laundering and other illicit activity. It’s becoming mainstream among transnational criminal organizations, Dobitsch said, and is used in ransomware attacks by nation-states and cyber criminals.

The U.S. announced last August that it had seized more than 300 cryptocurrency accounts from terrorist groups, including al-Qaida. Those groups solicit donations via cryptocurrency, Dobitsch said.

Andrey Rudakov/Bloomberg

Engineers on a cherry picker install mining rigs at the CryptoUniverse cryptocurrency mining farm in Nadvoitsy, Russia, on March 18, 2021.

A growing familiarity with cryptocurrency may open the door to cyberattacks by terrorist organizations, Dobitsch said, adding that the groups have displayed a “rapid ability to adapt” and may turn to ransomware to fund their operations.

Subcommittee Chair Elissa Slotkin (D-Mich.) and other lawmakers pushed Dobitsch and officials from the Secret Service and Homeland Security Investigations on whether they needed expanded legal authorities to track cryptocurrency and combat related cybercrime effectively.

The Secret Service needs more investigative authorities, more law enforcement officers, and more computer scientists to “keep pace with the adversary,” said Jeremy Sheridan, assistant director of the Secret Service’s Office of Investigations.

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John Eisert, assistant director of investigative programs at Homeland Security Investigations—a division of U.S. Immigration and Customs Enforcement—said his team has seen a huge increase in its cryptocurrency workload. HSI had one cryptocurrency investigation in 2011, and now has 604 active cases and has seized $80 million in cryptocurrency just this year, he said.

“I can tell you about the old days of law enforcement, following money launderers bank to bank, and good luck if they could hit 20 in a day,” Eisert said. “Now you could sit on your couch and move it 100 times over.”

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com



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