In recent years, the security community’s degree of concern about terrorist exploitation of digital currencies has varied. While some entities argue the threat is understated, others suggest that terrorist adoption of digital currencies is overstated. Ultimately, as numerous factors may influence the financial behaviors of individuals, networks, and groups, it is crucial to recognize that the use of digital currencies is often context-dependent.
Relative to other topics, publicly available information about terrorism financing is limited because terrorists strive to act clandestinely, and the entities working to counter their activities need to protect sensitive details for security reasons. As a result, commentary on terrorist exploitation of digital currencies is often hypothetical, speculative, and anecdotal, raising questions about the threat based on limited evidence. Such analyses can be valuable when consumers recognize the limitations of the work, but research drawing on concrete examples can also help piece together a clearer understanding of trends in specific networks and environments. Consequently, this article narrowly examines examples of digital currency usage in Syria by the Islamic State as well as al-Qa`ida and its past and present Syria-based associates. The authors use publicly available information from various sources to highlight some of the tactics, techniques, and procedures adopted by terrorists with interests in the region. For added depth, the article also draws on the authors’ interview with Collin Almquist, the head of Intel Production at Chainalysis, a company providing cryptocurrency data, software, and services to numerous governmental and non-governmental organizations (NGOs).
Before delving into specific instances where terrorists in Syria exploit digital currencies, it is helpful to review what digital currencies are and discuss why terrorist organizations and their members occasionally use these tools, particularly in Syria. In examining the specific cases in Syria, this article outlines some broader observations and walks through examples, highlighting some of the logistical nuances of various schemes. Finally, it concludes with a discussion about what policymakers, practitioners, and scholars can learn about terrorist exploitation of digital currencies from the Syrian context.