Singapore Government Affirms Cash as Primary Funding Method for ISIS, Not Cryptocurrency

• The Singaporean government recently emphasized that cash remains the primary method used by terrorist groups for financing.
• Despite increasing use of cryptocurrencies, cash and informal transfer systems prevail among terrorist organizations.
• A report highlighted that the financing methods for ISIS-affiliated groups continue to rely heavily on traditional channels.

Find out how terrorist groups are financing their activities and why cash still dominates over cryptocurrencies.

Predominant Use of Cash in Terrorist Financing

The latest report from the Singaporean government clarifies that although there is a rise in the use of cryptocurrencies globally, cash continues to be the dominant method for terrorist financing. Particularly, Islamist terrorism, with groups linked to the Islamic State in Iraq and Syria (ISIS), remains one of the most significant threats. The report sheds light on the operations of these groups, which are notably financially autonomous.

ISIS and Its Financial Independence

Diving deeper, the report reveals that most ISIS-affiliated entities are financially self-sufficient. They leverage multiple avenues, including social media, to gather funds. Despite the technological advancements and the growing adoption of digital currencies, these groups predominantly use cash couriers and informal value transfer mechanisms such as the hawala system. For instance, significant funds have been directed to ISIS combatants and their families in Syrian detention camps through financial institutions, money service enterprises, and neighboring state couriers, underlining the persistently vital role of cash.

The Role of Hawala and Informal Systems

The hawala system, an ancient method of money transfer based on trust rather than physical cash movement, is extensively utilized within the Islamic community. The report also references U.S. authorities’ observations that ISIS has channeled approximately $20,000 per month to individuals at the Al-Hol detention facility using intermediaries in Turkey. This system is not only limited to cash but also employs cash transfer applications and cryptocurrencies, though the latter is less dominant.

Conclusion

In conclusion, the Singaporean government’s findings confirm that cash remains a cornerstone of terrorist finance, even in the digital age. Despite the gradual inclusion of cryptocurrency and other digital methods, informal channels like hawala and traditional cash couriers still hold significant influence. Understanding these dynamics is crucial for developing effective counter-terrorism finance strategies.