A Guide to Anti-Money Laundering for Crypto Firms
Right-wing extremists (RWE) in Australia are raising money through platforms including YouTube, PayPal, and Buy Me a Coffee, a funding platform for creators.
A report by the Australian Strategic Policy Institute (ASPI) found that nine channels on Telegram, an instant messaging app with enhanced encryption, were used to share RWE content. They relied on at least 22 funding platforms ranging from cryptocurrencies to GoFundMe pages, alongside PayPal and a host of eCommerce services.
Our 2021 State of Financial Crime report highlighted how terrorist groups are increasingly adopting new technologies to finance their operations. In particular, we noted the rise in right-wing extremism in the United States, United Kingdom, and Germany. The ASPI report’s author, Ariel Bogle, noted: “Certainly the funding mechanisms we’re seeing in Australia have been used, and even pioneered, by far-right figures in the United States.”
However, the report notes that there are major knowledge gaps globally on acts of terrorism supported by RWE ideologies. The UN’s Counter-Terrorism Committee (CTC) has commented that “money is often raised to fund a milieu – which may be accessed by those aspiring to carry out more violent acts – via event fees, merchandising and donations.”
The issue was brought to global attention with the 2019 terror attack in Christchurch, New Zealand in which 51 people were killed in two mosques. While his own attack was self-funded, the terrorist responsible was reported to have made at least 14 donations to RWE individuals and groups.
In response to the findings, ASPI is calling on the Australian government to:
- Examine whether emerging online funding platforms “have obligations under the AML/CFT Act.”
- Monitor the financial behaviors of RWE individuals to see if their actions are covered by legal prohibitions on the “commercial exploitation of a person’s notoriety from criminal offending.”
- Explore new processes “to ensure that emerging online financial platforms are recording and reporting suspicious transactions, among other obligations, even if the service is not located in Australia.”
- Create systems that can better track linkages of crimes to extremist ideologies and groups.
The rise of a patchwork of online platforms for RWE financing, combined with the smaller value of many transactions, makes separating them from legitimate funds incredibly difficult. Firms should start by identifying the particular terrorist financing risks their business faces, based on its products and jurisdictional risk. Comprehensive sanctions lists should be incorporated into sanctions screening at onboarding, payment filtering, and be updated in real-time on an ongoing basis. Other enhanced due diligence measures such as adverse media screening and crypto/transaction monitoring solutions to identify TF typologies should also be considered.
To find out more about terrorist financing risks, download our 2021 State of Financial Crime report.
Originally published August 27, 2021, updated May 6, 2022
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