An NYC woman pleaded guilty yesterday on the charges of providing material support to a foreign terrorist organization. The woman had been researching how to aid ISIS from the United States and also went into the field, traveling to Jordan to provide medical aid to Syrian refugees. She is now facing 20 years in jail for her crimes.
NYC Woman Used Cryptocurrencies To Finance Isis
An NYC woman used cryptocurrencies as a part of a plan to direct money from the USA to several terrorists ISIS fronts. The woman, named Zoobia Shahnaz, admitted that she wired a considerable amount of money. According to investigations, the woman wired more than $150K to fake ISIS front companies.
The woman committed fraud to get more than 6 credit card from several banks. Court documents declare that she used this credit cards to buy more than $60K in cryptocurrencies. These cryptocurrencies were later exchanged for dollars using exchanges. These dollars were then deposited into several known front accounts for ISIS.
The court documents also state that the woman was able to obtain a loan for more than 22,500$ on Manhattan. Then she set her sights on collaborating with the insurgent group by having direct contact with them. Authorities were already aware of their movements trough intelligence inquiries.
Finally, authorities arrested her last December at the JFK airport. She tried to flee to Istambul. Authorities detained her to ask about the wires, but she gave contradictory answers.
Cryptocurrency and Terrorism Financing
There has been much discussion about how terrorists use cryptocurrencies for their advantage. That is why most countries are now forcing identification policies over cryptocurrency exchanges. Most exchanges now are implementing KYC (Know Your Customer) policies and AML (Anti Money Laundering) schemes. This time the authorities could leverage this data to use it to catch a dangerous woman.
But according to some investigations, cryptocurrencies have not been a good vehicle for terrorism financing. Last September the Congress held a hearing about cryptocurrency financing for terrorist groups. The hearing concluded that bitcoin and cryptocurrencies were a poor form of money for terrorists. This based on the hypothesis that these terrorists operate on environments where cryptocurrencies are not operable.
The most preferred way of financing terrorist groups anonymously is still cash, according to the hearing. But still, criminals and terrorist use cryptocurrencies to mask their schemes. Maybe not directly, but in the middle of a finance chain like in this case.