IS foreign fighters use crowd-funding, prepaid cards to fund terror

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Oct 24, 2015 21:56 IST
Foreign fighters for the Islamic State in Iraq and Syria (IS) are using crowd funding websites, virtual currencies and online payment systems to finance activities, according to an intergovernmental report. (AP Photo)

Foreign fighters for the Islamic State in Iraq and Syria (IS) are using or planning to use crowd-funding websites, virtual currencies and online payment systems to finance activities, an inter-governmental body combating the flow of funds to terrorists has warned.

The Financial Action Task Force (FATF) , which has 36 member countries, said in its latest report on Saturday that virtual currencies like Bitcoin, prepaid cards loaded with a fixed amount of electronic currency or value, and online payment systems pose new risks of terror financing.

Giving examples, the report said that in Germany one of the users of a Facebook group on recipes for women placed a call for funds in 2013. The appeal for funds mentioned a fighter in Syria who urgently required equipment, food and medicines and even provided a bank account.

In Canada, many suspected terror recruits used crowdfunding websites to raise money before leaving or trying to leave the country.

Crowdfunding websites allow people to set up fundraising pages and collect donations and investments from multiple individuals.

In Russia, investigators came across an instance when a group of individuals organised a scheme to raise funds through social networks and the internet, the report said. This group registered numerous e-wallets, credit cards and mobile phone numbers to collect money ostensibly for Syrian refugees.

But there were indications that this was a cover to fund terror, with the money being moved through a chain of transfers before being withdrawn and further transported by couriers.

Citing an example in Saudi Arabia of social network fundraising with prepaid cards, the report said some individuals associated with the IS first called for donations on Twitter and asked the donors to contact them through Skype.

On Skype, the donors were asked to buy an international prepaid card, like the ones used for mobile phones, and send the number. The number of the prepaid card was then sent to another country where the person would sell this card number at a discount and give the cash proceeds to the IS.

The report also gave an example of a US national, sentenced to 11 years in prison for conspiring to provide material support to the IS, who educated the terror group on how bitcoin works and told them ways to keep the virtual currency users anonymous.

Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. The activity is called mining and miners get transaction fees and newly created bitcoins.

The report concluded that though the risks are known, the actual extent use of these technologies by terror groups and their supporters is yet not clear.

Nearly two dozen Indians, living in the country or abroad, have joined the ranks of the IS of which six are believed killed in fighting, according to security sources.

The Paris-based FATF was founded in 1989 on the initiative of the G7 countries to develop policies to combat money laundering. In 2001 the purpose was expanded to act on terror financing.

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