Bitrabo Editorial
Despite the growing popularity of cryptocurrencies, terrorist groups still predominantly rely on traditional funding methods, as revealed by recent security investigations in Singapore.
Singapore’s Assessment of Terrorism Threat
The Ministry of Home Affairs in Singapore has published its latest terrorism threat assessment report for 2024, highlighting the continued high risk resulting from global instability.
The analysis conducted by the Internal Security Department indicates that while there has been a slight increase in the use of cryptocurrency for funding by terrorist organizations since May 2020, it remains minimal compared to the more commonly utilized cash transfers.
Cash couriers and traditional bank transfers are identified as the primary modes of fundraising for Islamist groups like ISIS, with the report emphasizing their preference for discreet and untraceable methods like the hawala system.
Wire transfers, money service businesses, and direct cash couriers are cited as the main channels employed by these organizations, despite the advancements in cryptocurrency technology.
Although cryptocurrencies have the potential for untraceable transactions, their actual usage in terrorist financing activities is significantly lower than conventional methods. An instance highlighted in the report involved a pro-ISIS group in the Philippines attempting to use cryptocurrencies for fundraising, but this has not become a widespread trend.
Continuous Refinement of Crypto Guidelines
While cash remains the preferred choice for terrorist funding, Singapore has continued to update its regulatory framework concerning cryptocurrencies. In April, the Monetary Authority of Singapore (MAS) introduced amendments to the Payment Services Act, focusing on custodial services for digital payment tokens, transmission facilitation, and cross-border money transfers.
MAS explained that these amendments empower them to enforce requirements related to anti-money laundering, countering the financing of terrorism, user protection, and financial stability on Digital Payment Token service providers.
Furthermore, MAS had made significant changes to crypto regulations in November, implementing trading restrictions such as bans on lending and staking to enhance the safety of the crypto market in Singapore.
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