ISIS Does Not Have a $300 Million Bitcoin War Chest, Chainalysis Argues

Blockchain analysis firm Chainalysis has fact checked several news reports suggests ISIS had a $300 million “war chest” in bitcoin, arguing there’s no evidence suggesting it has such an amount in BTC.

According to a blog post the firm published, the reports mentioned the director of the think tank the Counter Extremism Project, Hans-Jakob Schindler, saying authorities have searched for ISIS’s missing war chest since 2017, wondering if a total of $300 million hadn’t been found because they were converted to crypto. Schindler stated:

[Cryptocurrency] might have been one of the ways it might have been used… This would be an ideal storage mechanism until it is needed. If done right, it would be unfindable and unseizable for most governments.

Chainalysis pointed out that while terrorist organizations do raise funds via cryptocurrencies, most of the campaigns have failed to raise more than $10,000, which indicates limited adoption. If ISIS did funnel its oil proceeds into BTC, Chainalysis adds, trading volumes on local exchanges and money service businesses would have reflected this.

Cryptocurrency, moreover, isn’t an ideal storage mechanism for illicit funds as most blockchains are inherently transparent. Bitcoin’s blockchain, for example, is publicly accessible so anyone can analyse transaction patterns.

It also found ISIS did not fund the 2019 Easter Sunday Sri Lanka bombings using BTC. Media reports suggested it did so using CoinPayments, a crypto payment processor, based on a movement of $10,000 worth of crypto from an addresses controlled by ASIS shortly ahead of the attacks.

The transactions were, however, internal transactions which are standard practice for payment processor, according to Chainalysis.

Armed Palestinian Groups Did Not Raise $24 Million in Bitcoin

It then addressed other reports it claims mischaracterized the size and scope of a terrorism fundraising campaign led by the Popular Resistance Committee (PRC) through a money service business based in Gaza called Cash4PS.

The reports, Chainalysis notes, suggest the PRC raised $24 million based on transaction data, although these did took into account all addresses from the service were associated with the campaign. Most weren’t and Chainalysis found under $1 million worth of the $24 million were from addresses outside Cash4PS, most of which were likely not associated with the campaign.

The post didn’t address Hamas reportedly using BTC to fund its operations. Israel’s International Institute for Counter-Terrorism (ICT) has accused the group of using cryptocurrencies, with its bitcoin address being linked to the Islamic National Bank.

Featured image via Pixabay.