ADF STAFF
The Islamic State group (IS) has turned to cryptocurrencies to move money from places such as Somalia and South Africa to fighters elsewhere on the continent.
Private donations, known as “sadaqah” in Arabic, make up one of IS’s largest sources of revenue. Although much of this money moves through the informal system known as hawala, some IS supporters use digital currencies such as bitcoin or tether to transfer money quickly while avoiding detection by international agencies seeking to disrupt terror financing.
The Counter ISIS Finance Group reports that West Africa, home to Islamic State West Africa Province (ISWAP), has become a focal point for cryptocurrency transfers. The finance group represents about 80 countries and international organizations targeting IS.
Nigeria, where ISWAP operates, is second to India among the world’s largest adopters of cryptocurrency as legal tender. Nigerians use cryptocurrencies as a hedge against economic instability. The sheer volume of transactions — nearly $60 million in 2023 alone — means IS and other terrorist groups can get lost in the shuffle, experts say.
Cryptocurrencies such as bitcoin use blockchain technology to verify their value and track their movement. Users are anonymous, but once a cryptocurrency wallet address can be tied to an individual, it is easy to search the ledger for every transaction linked to that address.
Observers say that IS has seen its finances plummet from more than $300 million when it controlled parts of Iraq and Syria to about $20 million today. The organization has encouraged its African affiliates, such as IS-Somalia and Islamic State Central African Province in the eastern Democratic Republic of the Congo, to finance their own operations.
“It is easier to track cryptocurrency than it is to track cash,” Ahmed Buckley, an expert on terrorism financing, recently told the security publication Janes. “But that hasn’t prevented these terrorist groups and individuals from experimenting, from trying to adapt and learn, and see ways where they can exploit gaps.”