European Union Seeking to Ban Bitcoin in Aftermath of the Paris Terrorist Attacks

Bitcoin has been enjoying a smooth ride in Europe up until Friday’s Paris tragedy occurred, sending shock-waves of fear and blame all over the world.

A series of coordinated terrorist attacks, including mass shootings, suicide bombings, as well as hostage-taking swept Paris, France, on Friday, taking 129 lives and injured over 350 others. The Islamic terror group ISIS has claimed responsibility for the slaughter, which the French President Francois Hollande called the murderous spree “an act of war” by the Islamic State.

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Since then, the suspected ringleader of the attack, Belgian man Abdelhamid Abaaoud, was supposedly killed in a raid on an apartment in the Paris suburb of Saint-Denis by French police commandos. Believed to be close to ISIS leader Abu Bakr al-Baghdadi, Abaaoud allegedly oversaw the attack and funded it.

European Union Wants To Crack Down on Digital Currencies

After this tragic event, European Union (EU) member countries have joined forces to crack down on digital currencies, specifically bitcoin, according to a draft document seen by Reuters.

ISIS supporters have been known to use Bitcoin before to make anonymous donations to fund terrorist activities. What has not been shown is how those donations were used, if they have been used at all.

To crackdown on virtual currencies and anonymous payments made online and via pre-paid debit cards, including store-bought gift cards, in a bid to tackle terrorism financing after the Paris attacks, the EU interior and justice ministers will meet in Brussels on Friday for a crisis meeting.

They will urge the European Commission, the EU executive arm, to propose measures to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards,” according to draft conclusions of the meeting.

After the attacks, Ghost Security Group, a self-described counter-terrorism network of hackers, reportedly traced Bitcoin wallets holding more than $3 million or €2.8 million back to known ISIS members. Although very difficult to actually prove, they report that ISIS has built up a multi-million-pound fortune in Bitcoin.

Also following the attack, the online hacktivist group Anonymous declared war against ISIS, and released a YouTube video in French announcing the #OpParis, a campaign to hunt down ISIS’ social media channels and online supporters of the jihadist group. The group soon claimed to have taken down over 5,000 pro-ISIS Twitter accounts.

Many people undoubtedly see the situation as ISIS using bitcoin to anonymously fund their terrorist operations. However, the reason we know how much they have in funds, at least in bitcoin, is that it is immutably recorded on the blockchain… A lead to investigate that authorities would not even have if they had used cash instead. Several of the world’s highest authorities have even acknowledged this fact in recent months.

“Users can remain anonymous, making them susceptible to criminal exploitation. However, experts now argue transactions can be traced by analysing the blockchain – the public record of all transactions.” – The Commonwealth of Nations

The sadness from the Paris tragedy may have dampened Europe’s enthusiasm of Bitcoin. Prior to this event, many nearby European countries were among the most pro-bitcoin jurisdictions on Earth.

The UK Government, for example, has been enthusiastic about bitcoin and the blockchain technology while recognizing some regulatory risks. They have already committed £10 million to digital currency research, and recently, the government published a report stating that: “The money laundering risk associated with digital currencies is low,” while cautioning that if digital currency usage in the UK were to “become more prevalent” the risk could rise.

“Digital currencies are currently not a method by which terrorists raise or move money out of the UK (though they remain a viable method for doing so).” – UK Government report

Also, only last month, bitcoin got a major boost across Europe when its top court ruled that exchanging virtual currencies are exempt from value-added tax (VAT) in the same way as traditional cash.

The step backwards in popularity that bitcoin has to endure this week has been speculated as governments fighting back, using dirty tactics across social media.

In response to EU’s tentative action against digital currencies, Andreas M Antonopoulos, famous bitcoin expert, tech-entrepreneur, and author tweeted today that the “US and allies funded ISIS against Assad, provided weapons, provided training and now will blame bitcoin for the blowback.”

“Did you forget how US funded and trained militias to overthrow Assad? Where do you think ISIS came from? Remember when Saddam was an ally? Or AlQaeda was “mujahedeen”? Or ISIS was the Free Syrian Army? Blowback funded by our taxes.” – Antonopoulos

“Blowback is accelerating,” Antonopoulos claimed, which sparked much debate on social media.

A War on Bitcoin?

It would appear that the real war against bitcoin by governments may finally be beginning. Instead of some more direct type of attack such as physical violence against bitcoin miners, or laws stopping businesses from accepting the currency, the way governments appear most likely to fight bitcoin is by blaming it for the tragedies that they themselves create.

If this is indeed the new battlefield over bitcoin, the most effective response may prove to be an immediate counter-propaganda crusade by bitcoiners, perhaps using social media to constantly point out each and every false claim governments make about bitcoin. Reminding the world how much an immutable ledger would actually help stop terrorists may go a long ways to winning public opinion and allowing bitcoin to survive such a war.

If such a campaign were large enough and successful at making government propaganda against bitcoin look impotent, the overall action could have a very positive effect in spreading bitcoin to the mainstream much faster than it would without anyone attacking it at all.

What do you feel by the kneejerk reaction of the EU?

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