The Islamic State of Iraq and Syria (ISIS) has proposed using bitcoin to fund global jihadist efforts.

A blog post entitled ‘Bitcoin and the Charity of Violent Physical Struggle’ outlines a use case for bitcoin as a vehicle for terrorist financing, noting that its pseudonymous transaction capability fits well within the needs of jihadist organizers. Its author claims to be connected with the Islamic State, the so-called jihadi nation established by the ISIS leadership.

The concept that bitcoin could be used to help fund terrorists has been a long-standing concern among law enforcement and government agencies worldwide. Indeed, many restrictions placed on the use of digital currencies stem from these concerns.

According to the blog post, originally reported on by Sky News, bitcoin makes it difficult for anti-terrorist financing authorities to stop transactions from taking place. Services such as DarkWallet were specifically cited as methods for making bitcoin payments between terrorists even more untraceable. The blog author noted that bitcoin presents tax evasion benefits as well.

The blog states:

“This system has the potential to revive the lost sunnah of donating to the mujahideen, it is simple, easy, and we ask Allah to hasten its usage for us.”

Notably, the article cites Silk Road as an example of how bitcoin can be used to procure weapons, sell drugs and engage in other illegal activities that support terrorism.

Avoiding detection

Terrorist funders may find bitcoin and other digital currencies attractive owing to the broad supervision and monitoring of the global financial system. Specifically, in the post-9/11 world, many governments actively watch for suspicious money movements.

By using bitcoin, ISIS and other organizations could circumvent legal barriers that keep money away from terrorists. The digital currency’s borderless transaction capabilities and avoidance of major money conduits make it a logical fit for terrorists – and a likely target for law enforcement officials concerned about this exact application.

The blog author wrote that, as a result of anti-terrorism financial restrictions and cooperation between governments on these efforts, jihadist funding has all but dried up. Only the wealthiest supporters are able to contribute by using traditional currencies and payment methods.

However, bitcoin presents a hard-to-trace option for terrorism funding, the ISIS paper continues. As well, block chain-based smart contracts may be used to support jihadist efforts.

The blog post concluded:

“This allows our brothers stuck outside of the ardh Dawlatul-Islam to avoid government taxes [and] secretly fund the mujahideen with no legal danger upon them.”

Call to utilize DarkWallet

For terrorist groups like ISIS, the appeal of bitcoin lies in the ability to mask transactions – or at least hide them amidst the broader movements of the bitcoin network.

The potential use of bitcoin to fund terrorism is being actively investigated by a number of government agencies, including the US Department of Defense.

The article specifically calls for ISIS to use DarkWallet as a platform of funding, saying:

“DarkWallet’s beta release will be published within the next coming months, the mujahideen of Dawlatul­ Islam would simply need to set up a wallet and post their wallet address online. Then, Muslims from across the globe could simply copy the wallet address, login to their [wallets], purchase whatever amount of bitcoin they wish to send, and send them over.”

CoinDesk reached out to the DarkWallet development team for comment but did not receive an immediate response.

By citing DarkWallet specifically, the blog highlights potential avenues for terrorist financiers to use freely available bitcoin services. Beyond bitcoin, there are several altcoins that present potential applications of transaction anonymizing technology that could be leveraged to fund terrorism.