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NEW DELHI: Amid fears that the Taliban group in Afghanistan may turn to cryptocurrencies as a way to finance its operations, digital currency exchange platform Coinbase has said that transactions associated with terrorist financing in 2020 made up less than 0.05% of all illicit volume in crypto. Moreover, illicit activity represented far less than 1% of all activity in the crypto space in 2020.

“While the industry has come a long way since Satoshidice, Mt. Gox and the Silk Road, illicit activity has dwindled but not fully ceased. However, representing far less than 1% of all activity in the crypto space in 2020, illicit activity is no more of a concern for the crypto-economy than it is for the traditional financial system," Coinbase wrote in a blog on Medium, publishing the findings of an analysis conducted by its special investigations team.

The analysis focused on the largest terrorist financing-related organizations’ fundraising efforts over the past few years.

“Assessing these organizations’ fundraising over time, we find that Hamas has raised the most funds, by far. This is likely because Hamas actively solicits donations primarily in the form of bitcoin on their website and related Telegram channels," the crypto exchange said.

Hamas first began soliciting donations in Bitcoin in January 2018, with a singular donation address.

 

Hamas first began soliciting donations in Bitcoin in January 2018, with a singular donation address.
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Hamas first began soliciting donations in Bitcoin in January 2018, with a singular donation address.

The research also found out that altcoins-based fundraising has gained some interest. Altcoins is a cumulative term to define cryptocurrencies that came after bitcoin.

“Beginning in August 2020 through August 2021, terror organizations began receiving ETH (ether), ERC20 tokens, and XRP (ripple) donations. This fundraising can solely be attributed to a Saudi-led jihadi activist movement, which began soliciting donations in the form of BTC, ETH, XRP, and various ERC20 tokens in 2020," Coinbase said.

According to the exchange, after identifying a terror funding campaign, it blocklists any crypto addresses associated with these organizations, detect wider terror organization campaign efforts and coordinate with law enforcement agencies.

With institutional and consumer interest in crypto at an all-time high, alongside the continued rise of decentralized finance (DeFi, 2020 and 2021 have seen cryptocurrency achieve the mainstream adoption that the space has anticipated for many years.

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