- Chainanalysis reacts to the misconceptions about the crypto industry in terrorism funding.
- The blockchain analytics firm says the data are wrong.
Besides spreading farce about Bitcoin and crypto mining, another aspect that isn’t true about the crypto industry is its role in terrorism funding. So, while there are attributions, the role it plays is very small. Hence, Chainanalysis is taking its time to make the facts known.
Chainanalysis Points Out Misconception About the Crypto Industry
- One of the things about the crypto industry is the attribution of crime funding to the industry. So, we are now saying that crypto is totally free from the accusations of financing crime and terrorists. However, the manner through which reports are made about it is over the top. So, the figures most analysts use are way higher than the actual figures.
- This is what Chainanalysis is trying to point out after they made a report of the overstretching of reports of terrorist financing. So, Chainanalysis made a report toward correcting misconceptions regarding the use of crypto by terrorists to finance their operations. Apparently, the crypto industry only played a minor role in terrorist financing.
Going Into Details About the Report from Chainanalysis
- Chainanalysis was more of pointing out the truth. Yes, cryptocurrencies often play a role in terrorist financing. So, some terrorist organizations, including Hamas, Jihad, and Hezbollah, raise and transfer funds using crypto. However, what Chainanalysis is trying to say is that they aren’t as big as they are said to be. So, crypto terrorist financing makes up a small fraction of illicit crypto transactions.
- In their report, Chainanalysis said, “Terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit.” So, in this report, Chainanalysis said the use of traditional banks is the major channel for terrorist financing. Apparently, traditional fiat-based methods like financial institutions, hawala, and shell companies are their primary financing channels.
- The next question is, why is crypto not the major channel? So, Chainanalysis has an answer to this. One of the major properties of the crypto industry is the transparency of the blockchain. So, one of the major reasons Hamas stopped accepting Bitcoin donations is because of transparency. Law enforcement can easily trace those funding them through the blockchain.
What’s Next in this Saga? Righting the Wrong?
- Although the crypto industry often receives accusations of helping fund terrorists, it does much better work. So, the crypto industry, through the blockchain, helps track down terrorist funders.
- One can see it in the recent actions between Israel and Hamas. So, the Israeli government disabled over 100 Binance accounts potentially linked to Hamas.
Conclusion
Blockchain analytics firm Chainalysis was quick to point out some errors and misconceptions about the crypto industry. So, one of them is the number of transactions for the funding of terrorist organizations. Although these things do happen, traditional finance plays a major role in aiding terrorism funding. On the other hand, the crypto industry only plays a very tiny part in the whole scenario.
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