The Financial Action Task Force (FATF) has published a report in October 2023 which discusses the significant international market of crowdfunding, its growth, and its potential for exploitation by terrorist actors. Crowdfunding is an innovative fundraising solution used for legitimate projects but can be abused for terrorist financing. The FATF conducted research showing that terrorist groups like ISIL, Al-Qaeda, and ethnically/racially motivated terrorists use crowdfunding to raise funds for their activities.
The report outlines four main ways in which crowdfunding platforms can be abused for terrorist financing:
- Abuse of Humanitarian, Charitable, or Non-Profit Causes: This involves individuals or organizations launching crowdfunding campaigns for legitimate humanitarian causes, but diverting the funds for terrorist activities. There’s also a risk of extortion or skimming in high-risk environments controlled by terrorists.
- Use of Dedicated Crowdfunding Platforms: Terrorist actors may exploit specialized crowdfunding platforms to raise money for various activities, some of which may promote hate or violence without meeting the threshold of terrorism.
- Use of Social Media Platforms and Messaging Apps: Terrorists strategically use social media to share campaign links, recruit supporters, and transmit payment instructions. Algorithms can reinforce extremist beliefs and lead users to specific fundraising causes.
- Interaction of Crowdfunding with Virtual Assets: Crowdfunding campaigns may involve digital forms of payment, like Bitcoin. Anonymity-enhancing services can be used to conceal the origin and destination of funds linked to terrorism, but this method has limitations.
The report can be accessed in the following link: Crowdfunding for Terrorism Financing (fatf-gafi.org)