The fact that crypto coins have been used in terror funding cannot be ignored. In 2016 a jihadi unit of Gaza named Ibn Taymiyya media center ran an online campaign to gain funds through bitcoins. In another instance, a teen from Virginia was taken under custody for providing instructions to fund IS using bitcoin through his twitter handle. Again, a case was unearthed in Indonesia where PayPal and bitcoin were being used to fund IS.
It has been claimed that lack of government control of virtual coins has allowed anti-social elements to trade and gain capital. Crypto based trades provide anonymity and non-traceability of the highest grade hence money launders, and cybercriminals find it the most attractive platform for conducting operations. The issues of geographical barriers and identity authentication are flushed down the gutter. Financial authorities have not been able to trace down such activities. In the last eight years the use of bitcoin has multiplied, and with criminals using the dark web for transactions, it is nearly impossible to detect a flawed trade.
In the context of India, the matters become more serious due to a better technological infrastructure and internet availability in comparison to Africa and Middle Eastern countries. As per reports, the scale of bitcoin users is rising with every month plus the underground economy has also accepted the digital currency. Thus, a terrorist organization can work more easily than ever with a much larger ratio. Furthermore, the legal structure to inspect and prohibit such actions is not skilled enough as the government hardly finds it a serious obligation.
The country needs to develop effective counter terrorism and money laundering system to tackle the new challenges it faces right now. Again, a solid legal structure has to be established for taking any step against such criminals. Although, the RBI has banned every financial institution from entering into the crypto space yet the number of crypto dealings in India has not stopped.
One should also know that digital currencies have a lot of positives too. If the largely underserved Indian population gets the chance to make financial transactions without waiting for the end of formalities, then the economy is bound to boost. Not only will the transactions be faster and easier, but the security and authenticity of the trade will also increase.
However, the use of digital coins in terror funding is on an infant level. The uncertainty of bitcoin value, lack of IT skills, an underdeveloped infrastructure and the problems faced in the conversion into fiat currencies have not allowed terrorists to improve the magnitude of their operations. In order to skip barriers laid down by the government ‘Hawala’ business backed by virtual coins is on the rise.
It seems to be a matter of time when India gets terrorized against just because of ignorance and over-confidence. The authorities should take steps against the underground operations before it gets too late. Cryptocurrencies are a blessing if used soundly but can also turn out to be a nightmare in wrong hands.