In another sign of growing mainstream cryptocurrency acceptance, the U.K. Treasury just declared cryptocurrencies are “low risk” when it comes to concerns over terrorists and their financing efforts.
This news won’t necessarily come as a surprise to enthusiasts and general defenders of crypto, but alas, it’s a significant development because it mitigates one of the most biting conservative critiques against cryptocurrencies, namely that terrorists could use the virtual money to bypass international financial sanctions.
In the Treasury’s latest risk assessment report, officials concluded that, at least in the U.K., terrorist efforts are seldom linked to financing, making terrorists’ abuse of cryptocurrencies in the British Isles highly unlikely.
Per the report:
Unlike most other criminals, the raising and moving of funds is not a terrorist’s primary aim […] The UK does not typically see large-scale coordinating fundraising activity for terrorist groups. Recent terrorist attacks across Europe have demonstrated that the costs involved can be very low; for example, as low as hiring or stealing a vehicle or purchasing knives.”
This is to say, then, that terrorists in Europe don’t need to raise Bitcoin and Ethereum to conduct their activities; they make do with more primitive alternatives.
— Crypto Window (@CryptoWindow) October 27, 2017
For this reason, the Treasury’s report took the modest stance of suggesting it’s “unlikely” terrorists’ use of cryptocurrency financing will increase substantially over the next five years. This could change, of course, and the situation will be re-evaluated during the next Treasury report in 2022.
But the drafters of the document were realistic, acknowledging that the risk of cryptocurrencies being put to nefarious ends would increase correlatively as adoption of these currencies increase in general:
As the number of businesses accepting digital currency payments grows, there is an increasing risk of criminals using the currencies to launder funds without needing to cash out into non-digital, or ‘fiat’ currencies.”
TLDR: The U.K. Treasury thinks the threat of terrorist financing using crypto is “low-risk” in the short-term, leaving the possibility of it happening more in the future open, however.