The volatile nature of the crypto market makes cryptocurrencies an unreliable method of transferring or moving funds in meaningful volumes in order to finance operations in a timely fashion.

Price volatility

Cryptocurrency transactions in the digital space are traceable, undermining the anonymity of those involved. 

Transaction Traceability

Terrorist organizations appear to have largely steered clear of cryptocurrencies
because of the lack of reliable technical and telecommunications infrastructure in
many countries where they operate.

Digital infrastructure requirements

Managing large amounts of cryptocurrencies requires a degree of technological knowledge and sophistication that most terrorists are unlikely to possess. 

Digital skill requirements

- Price volatility
- Transaction traceability
- Digital infrastructure requirements
- Digital skill requirements

University of Minnesota - Twin Cities

Since cryptocurrencies are generally anonymous and able to operate across jurisdictions, they provide an unique opportunity for terrorists to hide their financing methods from both government agencies and law enforcement. 

Financing of terrorism with cryptocurrencies

Wolf, Siegfried O. (2021). Terrorism financing: Crypto-Taliban? South Asia Democratic Forum. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3941105

Terrorism financing: Crypto-Taliban? 

Limitations of terrorism financing with cryptocurrencies

Cryptocurrency exchanges serve both as marketplaces for selling and buying
cryptocurrencies online and as connection points between digital spaces and traditional financial mechanisms. Their potential use for the financing of terrorism has made them the focus of. anti-money laundering and counterterrorism regulators.

Significance of cryptocurrency exchanges in terrorism financing

- Izz ad-Din al-Qassam Brigades
- al Sadaqah
- Jahezona 
- Far-right/neo-Nazi groups

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