The feds must rein in crypto-financed terrorism

While regulators and policymakers dither and try to decide if cryptocurrencies have a future in the economy, early adopters, including terrorists and violent extremists, are exploiting a law enforcement blind spot. The ease by which money laundering and terrorism financing take place with cryptocurrencies and the more dangerous 

Stronger regulatory standards for content monitoring and Know Your Customer procedures for social media, messenger services and crowdfunding platforms are needed when these platforms are used for commercial purposes, such as through web shops or crowdfunding campaigns. These internet platforms presently operate purely on their own non-regulated standards, which presents an uneven defensive mechanism across various platforms and generally very low moderation standards.

Noncustodial wallets and exchanges, as the Financial Action Task Force (FATF) advises, should be considered high-risk technology. Therefore, their use outside of exchanges should always be considered as a strong indication of nefarious activity. If exchanges choose not to require users that hold noncustodial wallets to fully disclose their identity during a transaction involving such noncustodial wallets, it would be advisable that these exchanges do not process such transactions.

Ultimately, only through governmental cooperation with industry stakeholders, combined with effective regulatory standards for the tech and fintech industries, can substantial progress be achieved and the risk of cryptocurrencies and privacy coins being used to fund extremism and terrorism be substantially reduced.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.