A 27-year-old American woman has pled guilty to supporting ISIS with the use of Bitcoin, money laundering, and bank fraud.
Using Bitcoin to Fund Terrorism
According to the U.S. Attorney’s Office for the Eastern District of New York, in 2017, Zoobia Shahnaz, a resident of Brentwood, Long Island, wired over $150,000 to people and shell organizations that were fronts for ISIS in Turkey, Pakistan, and China, reports CNBC.
Prior to June 2017, Shahnaz had worked as a lab technician in Manhattan for around $71,000 a year. However, in 2016, she traveled to Jordan to volunteer with the Syrian American Medical Society. Prosecutors wrote in a court filing last year that:
For two weeks, she assisted in providing medical aid to Syrian refugees in Amman [Jordan] and in the Zataari Refugee camp, where ISIS exercises significant influence.
Yet, while it’s possible she came further under the influence of them there, she had also previously conducted her own research on “joining the ISIS,” as well as how to travel to Syria. In March 2017, Shahnaz proceeded to scam Chase Bank, American Express, TD Bank, and Discover by obtaining six credit cards.
A court document states that she then used these, in addition to 10 others in her name, to purchase $62,703 in cryptocurrencies such as Bitcoin. The document notes: “Most of these cryptocurrencies that [Shahnaz] purchased were then converted to U.S. dollars and transferred into a checking account in the defendant’s name.”
Following on from that, in June of the same year, she fraudulently applied for and obtained a loan from a bank in Manhattan, worth $22,500. She then proceeded to make several wire transactions overseas. Before being intercepted at JFK airport for a flight to Pakistan before heading to Turkey in July 2017, she had quit her job and obtained a Pakistani passport, without her family’s knowledge.
Zoobia Shahnaz faces up to 20 years in prison when she is eventually sentenced.
No Threat at the Moment
While this case highlights the use of crypto in funding terrorism, it’s not highly effective.
That’s according to Yaya Fanusie, the director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance. In congressional testimony given in September, Fanusie explained that:
For the moment, terrorist groups may lack the necessary skills to employ digital currencies more
frequently and effectively.
He went on to said that “cold hard cash is still king.” However, that’s not to say that law enforcement and intelligence agencies should be lax with their efforts. He added:
There are enough case studies of jihadist groups experimenting with cryptocurrencies to suggest that…terrorists [will] to try to exploit digital tokens as the technology spreads.
Do you think cryptocurrencies will be used more widely by terrorist groups in the future? Let us know in the comments below.
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