Chainalysis: Only Small Crypto Is Used For Criminal Activities, No Need To Overestimate

Blockchain analytics companies reveal crypto-related facts used for terrorist acts and illegal acts. (Photo; Doc. Bybit)

JAKARTA - A recent report from Chainalysis has tried to resolve a misunderstanding surrounding the use of cryptocurrencies by terrorist organizations for their funding.

Although the report acknowledges that some Palestinian militant groups, such as Hamas, Hezbollah, and Palestinian Islamic Jihad, use digital currencies to raise and transfer funds. The blockchain analytics firm insists that this amount is only a fraction of the total volume of cryptocurrency transactions.

The report also states that fiat-based traditional methods, such as financial institutions and shadow companies, are still the main sources of funding for these terrorist groups.

The existence of blockchain technology makes cryptocurrency transactions better tracked, allowing government agencies and the private sector to cooperate in identifying and disrupting the flow of terrorist funds.

It is important to remember that this report also highlights the role of service providers in facilitating the movement of funds related to terrorism. A number of suspicious service providers can process large amounts of funds, and investigations often need to be focused on them.

Although these reports reveal complexity in tracking terrorism funds through cryptocurrencies, they also warn against directly concluding that all of these transaction activities are terrorism-related. Most of these funds may not be directly related to the purpose of terrorism.

Coinbase, a crypto exchange, also echoed similar opinions by emphasizing that most terrorist funding still relies on traditional cash rather than cryptocurrencies. They also support clearer regulations for the crypto industry to ensure compliance in various jurisdictions.