Bitcoin and terrorism: a dismantled funding network

Bitcoin and terrorism: a dismantled funding network

Bitcoin et terrorisme : un réseau de financement démantelé

The National Anti-Terrorism Prosecutor’s Office (PNAT) today announced the arrest of 29 individuals suspected of having participated in a network to finance terrorist groups. The arrests took place in 26 different departments and were accompanied by a wave of 56 searches. As the statement released today explains, this network used “cryptocurrency money orders” sold at tobacconists to transfer money. “The terrorist financing network targeted by the anti-terrorism operation carried out today has been active since 2019 and is mainly based on the purchase, in France, of cryptocurrency coupons whose references have been transmitted by secure messaging to jihadists present in Syria “, explains the PNAT.

“The investigations revealed that dozens of people residing in France have repeatedly visited tobacconists throughout the country in recent months to anonymously purchase coupons. ‘a value between 10 and 150 euros. These coupons were then credited to accounts opened from abroad by jihadists who converted them into cryptocurrency on bitcoin buying platforms. The press release specifies that this network demonstrates an evolution of practices in terms of terrorist financing, which in the past relied on “cash mandates to collectors located in countries bordering on Syria”.

The popularization of cryptocurrencies and the increased surveillance of traditional networks has prompted a change in tactics. According to French justice, this funding network was set up by two French jihadists installed in Syria since 2013. It indicates that the identification of the 29 individuals arrested today was made complex by the lack of identity verification on the purchase of these cryptocurrency coupons sold in different points of sale.

The little cryptoPMU around

The sale of these cryptocurrency coupons in France became popular in the course of 2019. Several French companies rely on a network of resellers to offer these coupons, which according to their sites allow you to buy a coupon containing a QR Code or a PIN code which then allows you to be credited with an amount in bitcoin on the wallet of your choice. According to the PNAT, it was these “references” that were purchased, then sent by secure messaging to jihadists present in Syria.

As reported by France Info , the Collective of United Families – which represents several hundred families from French present in Iraq and Syria – denounces for his part an “unworthy police operation”. The collective indicates that the remittances in question here are aimed at supporting members of families “detained by the Syrian Democratic Forces and the Kurdish administration in northeastern Syria.”

It is in any case a case that risks overshadowing the sale of bitcoin in small businesses: the company Keplerk had announced that it had implemented a network of coupon sales of this type in 2018 . Contacted, Keplerk has not yet answered our questions and the article will be updated with their answers. The company Digycode had for its part started to offer this type of service in 2017, it explains that it is currently in the process of implementing “a compliance of this activity which implies increased monitoring of the use of the service within the framework of systems introduced by the PACTE law in 2019 ”. This law provides an initial framework for players working with cryptocurrencies, who must in particular submit to a control exercised by the AMF.

At the time, the central bank, the AMF and the ACPR had already warned about the risks of speculation linked to the sale bitcoin . It will now also be necessary to convince the authorities that these services are not used for illegal purposes or to finance terrorist groups.

Article updated on 09/30 to correct the date of implementation of the Digycode service

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