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In addition, Islamic law allows the use of Bitcoin and other cryptocurrencies to fund jihadis, and cryptocurrency has become an alternative to the mainstream financial system and legal tender. In June , an American teenager admitted that he had taught Islamic state members how to use Bitcoin.

The Islamic State often kidnapped and blackmailed Europeans in Syria. By using Bitcoin as a ransom payment tool, terrorists can raise funds and facilitate the transfer of funds. This part of the funds was then used to fund terrorist attacks in Europe Teichmann, In addition, there are also many anecdotes about terrorists using cryptocurrency in blackmail schemes online.

In January , criminals used ransomware to control the computers of the Lincoln Group, demanding a ransom of USD worth of Bitcoin, but they ultimately failed. In November , three Greek banks received blackmail threats, demanding payment of hundreds of thousands of euros in Bitcoin Brown, In recent years, the amount of evidence of Bitcoin being used in criminal activities has been increasing. Compared with other countries, Indian terrorists and drug syndicates prefer to use Bitcoin for transactions Misra et al.

Brill and Keene argued that the irreversibility of cryptocurrency transactions and low transaction costs are why cryptocurrency is attractive to terrorist financing. In contrast, cryptocurrency is not attractive to terrorist financing because of the large fluctuation of cryptocurrency prices, the lack of trust mechanisms, the difficulty of conversion to main currencies, and the maturity of global fund tracking technology. Xu and Zou argue that because the supply of cryptocurrency is not flexible, the currency itself lacks internal value support and credit guarantee, and the price of cryptocurrency can be manipulated, so terrorist organizations have shown certain restrictions on its use.

Eaddy explained the factors influencing the use of cryptocurrency by terrorist organizations based on the information and communication technology development index, currency exchange restrictions, cryptocurrency price fluctuations, and anti-Western sentiment.

Therefore, venture capital is attractive to terrorist organizations. Terrorist organizations employ cryptocurrencies to create venture capital and obtain higher funds Baron et al. A key element of cyberterrorism is the use of cryptocurrencies, such as Bitcoin, to buy and sell prohibited goods and services on the dark web. Jacobson and Weimann believe that given the geographic range, speed, and degree of anonymity provided by the dark web, it will attract terrorists.

The dark web is likely to be an extremely effective and secretive platform for terrorists to use cryptocurrency. Measures against the use of cryptocurrency by terrorist organizations He et al. Che and Hou proposed preventing the use of cryptocurrency by terrorist organizations in terms of legislative protection, science and technology supervision, hierarchical control, and cross-regional cooperation. With increased innovation in cryptocurrency technology, it is very difficult to supervise it.

Moreover, many countries with weak financial facilities have not established a regulatory system for cryptocurrency. Therefore, we attempt to clarify the potential future development ability of cryptocurrency based on its attributes and development status, as well as the nature of its judicial supervision, in order to enhance the overall understanding of cryptocurrency in terrorist financing.

The background of terrorist financing The development status of terrorist financing Terrorism has long been threatening national security and the life and property of nations around the world. The fundamental measure to eliminate terrorism is to improve unfavorable socio-economic and political conditions and to prevent individuals from turning to terrorism, which requires long-term efforts. In the short run, because terrorist attacks inevitably involve costs that cannot be ignored, the more direct means is to cut-off the financing channels and methods of terrorist organizations.

Different international organizations and countries focus on the definition of terrorist financing according to their own administrative norms and financial practices. According to the IMF, terrorist financing refers to the collection and provision of funds to support terrorist activities or terrorist organizations.

Sources of terrorist financing include legal and illegal income. To improve the secrecy of terrorist financing and reduce the risk of financing, terrorist organizations often choose to carry out financing activities in a variety of ways according to the actual development of the region. Specifically, the financing methods of terrorist organizations include state funding, legal modes, illegal ways, and emerging financing modes.

Illegal means include the control of local key resources, extortion of agriculture and manufacturing, kidnapping and extortion, robbery and theft, drug smuggling, trafficking in illegal cultural relics, human trafficking, and illegal taxation of transit goods and cash Wang, International institutions, countries, and regions have been constantly improving their judicial supervision. Where traditional fundraising methods cannot meet the needs of terrorist organizations, new financing is gradually emerging, including the use of cryptocurrency by terrorist organizations.

Studies have shown that since , terrorist organizations have begun to use cryptocurrency to fund their operations, including the Islamic state, Al Qaeda, and Hezbollah, although as far as the current situation is concerned, cryptocurrency has not become the main financing channel for terrorist organizations. Of course, ATMs have the characteristics of easy accessibility and good users. Therefore, encrypted ATMs may be subject to various attacks, such as phishing or spoofing attacks Das et al.

Criminals destroy the traditional personal identification code and password security system on an ATM to obtain user information, thereby stealing a large amount of funds. Methodology Using the method of literature induction, we collected existing research results on cryptocurrency in terrorist financing at home and abroad, such as the IMF, the World Bank, FATF, and other relevant legal norms, guidance documents, research reports, and academic monographs, and summarize and sort out the existing research, so as to identify blank areas of research and determine our research focus and direction.

In addition, we comparatively analyze the different financing channels of terrorist organizations horizontally and vertically. Therefore, the motivation of terrorist organizations to choose financing channels is identified to evaluate the possibility of terrorist organizations using cryptocurrency for terrorist financing. Evaluation of cryptocurrency abilities in terrorist financing Cryptocurrency is considered a general term in blockchain Ma, It is a type of convertible virtual currency that is based on mathematics, decentralized, and protected by encryption technology.

It integrates the principles of cryptography to achieve a distributed, decentralized, and secure information economy. Because Bitcoin is one of the earliest cryptocurrencies, existing research usually takes Bitcoin as an example that represents the typical characteristics of cryptocurrency Xiao, In the past few years, there has been evidence that terrorist organizations have the motive to use cryptocurrencies.

Although the use of cryptocurrency in terrorist financing has not been widely used, the possibility still places great pressure on existing anti-terrorism financing. We attempt to systematically analyze the future development ability of cryptocurrency in terrorist financing from the aspects of its internal attributes, development mode, and judicial supervision in the hope of providing a reference for the fight against terrorist financing in the new situation.

Factors to improve the use of cryptocurrency by terrorist organizations Improve the anonymity of cryptocurrency Anonymity is an important attribute that distinguishes cryptocurrency from traditional financial currency; it allows users who use cryptocurrency to hide their identity, thus hindering the tracking and monitoring of judicial institutions.

With the development of information technology, the anonymity of cryptocurrencies has improved. In addition, cryptocurrency developers often use a variety of means to enhance anonymity, such as mixing a variety of cryptocurrencies, confusing IP addresses, and hiding currency ownership. The use of these means significantly improves the anonymity of cryptocurrencies. The anonymity of transactions is an important factor in the financing activities of terrorist organizations.

In most countries and regions of the world, it is illegal to provide financial support to known terrorist organizations, and anonymity ensures that the funds are difficult to trace. Not only can terrorists benefit from the anonymity of cryptocurrency, but organizations or individuals that try to support terrorism through donations can also reduce their risk of being prosecuted.

Expanding the cryptocurrency market One of the preconditions for the greater use of cryptocurrency by terrorist organizations is the expansion of the cryptocurrency market. The continuous growth of the monetary market means that the acceptability and trust of users in this transaction mode is improving. At present, especially in areas where terrorist organizations are active, the acceptability of cryptocurrencies is still low.

The Middle East is a source of terrorist organizations and an area with a high incidence of terrorist attacks. Although the future development of cryptocurrency technology is unpredictable, if the number of users using cryptocurrency increases significantly worldwide, terrorist organizations are likely to increase their use. In addition, an actual terrorist attack will also affect the global use of cryptocurrencies. Previous studies have shown that there is a relationship between terrorist attacks and cryptocurrency returns, but there is controversy about whether the relationship is positive or negative.

On the one hand, terrorist attacks may lead to a risk aversion reaction in traditional financial markets, which will lead to a shift in investment in cryptocurrency. On the other hand, terrorist attacks may lead to people emigrating from nations or regions that do not regulate cryptocurrency because they remain vulnerable to hackers and cyber theft Patel and Pereira, As a major source of financing activities of terrorist organizations, the drug trade has proved that the monthly income of international cryptocurrency can reach several million US dollars through the sale of illegal drugs alone Kruithof et al.

Cryptocurrency is gradually being used in the dark web market because of its suitable properties. The increase in transactions in the dark web market will inevitably stimulate the use of cryptocurrency by terrorist organizations. There is no clear or positive evidence for the use of cryptocurrency in the darknet markets by terrorist organizations currently.

Ponsford pointed out that the laws and regulations on cryptocurrency in China, the USA, and Australia have inconsistent supervision. The inconsistency in the regulation of cryptocurrencies will hinder the crackdown on criminal acts that abuse the technology. Teichmann and Falker believe that cryptocurrency is a very suitable tool for money laundering, terrorist financing, and corruption, but the current compliance efforts of various countries on cryptocurrency are ineffective.

In July , FATF announced a 1-year review of the guide to risk-based approaches for virtual assets and virtual asset service providers issued in June The review found that 19 of the 54 reporting jurisdictions had not yet implemented the standards required by the guidelines in their domestic laws FATF, c. Globally, a number of countries have set up special departments to regulate cryptocurrencies.

However, most countries have yet to take any action against cryptocurrencies. These gaps in the global regulatory system provide huge loopholes for terrorists to abuse cryptocurrencies. At present, regulatory oversight in the USA, Europe, and China makes it difficult to obtain Bitcoin anonymously in transactions. However, the current supervision is limited to a certain extent. For countries with relatively weak financial systems and imperfect anti-terrorism financing systems, the supervision of cryptocurrency is lax.

In addition, even in countries with strict supervision, there is also the proliferation of terrorist financing due to the inconsistent regulatory requirements between countries or regions; in the USA, financial regulation does not cover non-exchange transactions, nor does it cover block chain transactions outside the regulated entities. Therefore, this leads to the exchange of cryptocurrencies, and terrorist organizations achieve their purpose of transferring funds.

Overall, the potential terrorist financing risk of cryptocurrency is not well understood in many countries, and many countries do not have the ability to identify the use of cryptocurrency for terrorist financing. This situation provides an opportunity for terrorist organizations to use cryptocurrencies. Some scholars have even pointed out that the cryptocurrency agreement runs counter to the existing concepts of AML and ATF.

Factors of reducing the use of cryptocurrency by terrorist organizations Bad development mode of cryptocurrency With the growth of cryptocurrency types, uncertainty and internal struggle have plagued the long-term development of many cryptocurrencies, significantly reducing the reliability of cryptocurrencies. This risk is inherent in any effective cross-border regulatory measure.

A current example outside the world of cryptocurrencies is the misuse by authoritarian states of the instrument of the international arrest warrant to detain regime critics. Other conceivable regulatory approaches p. They will not be discussed in detail here, because they are less effective compared to transaction blacklisting for several reasons.

For example, every method that tackles accounts precise: public keys is easy to bypass by simply creating new accounts p. Traditionally, criminal investigators in the field of financial crimes or investigators in general when tracing the money trail rely on the search and seizure of bank documents and files, the questioning of bank employees as witnesses and the automatic screening of bank accounts. Without central administration and the ability of every user to create an indefinite number of accounts by himself or herself, those investigation methods must fail.

Although the number of KYC systems will rise with governmental regulation, investigators must find ways of identifying Bitcoin users who are not covered by KYC systems p. To tackle this challenge, investigators can use the public blockchain data: every transaction can be traced back through the blockchain to the genesis of the transferred bitcoins. Investigators can use forensic software to process the blockchain data and combine it with datasets from other internal and external e.

Internet data sources. In this way investigators are sometimes able to draw conclusions about the natural and legal persons involved [ 3 , 4 , 32 , 38 , 51 , 52 ]. Both ways can affect the needs and interests of several natural and legal persons in and around the Bitcoin system. In the traditional currency and banking system, governments, central banks, private banks and other payment processors are the main actors.

Governments create currencies and banks operate the system, subduing to governmental rules. Other natural and legal persons, like bank customers and merchants, are only allowed to participate among the required conditions. For example, every bank customer has to identify himself with an official document when opening a bank account. In contrast thereto, every Bitcoin user can create bitcoins by providing computing power to the system. The system is operated by the peer-to-peer network, in other words, by all users who provide CPU power.

They have to consider many different kinds of natural and legal persons in and around the Bitcoin system. Exchange platforms, remote wallet providers and mixing service providers are included in this category. By regulating cryptocurrencies and investigating in the blockchain, governments and prosecutors collide with several interests and needs of the currently affected persons. In the literature it has recently been claimed that most Bitcoin users nowadays no longer manage their Bitcoins themselves i.

Exchange Service, Wallet Provider. It is true that persons who merely hold a claim against a Bitcoin service provider enjoy the same protection by fundamental rights e. To the best of my knowledge, no empirical study has been published on the question of how many Bitcoin users actually manage their Bitcoins themselves, how many users use service providers and how these service providers handle the Bitcoins for their customers exactly.

Moreover, the behavior of users in Bitcoin or other cryptocurrency systems can change at any time, so that the basic considerations regarding the protection of fundamental rights will continue to be important in the future. And finally, regulatory concepts must cover those users who deliberately do not use regulated service providers in order to circumvent traditional AML regulation. For example, exchange platforms want to conduct their business, mining pools want to earn their reward in Bitcoins, users want to make transactions in the pseudonymous network and store value in bitcoins, etc.

Many of these interests and needs might be protected by fundamental rights e. In order to develop new regulation concepts and investigation methods, governments and law enforcement agencies need to identify the fundamental rights they have to consider.

To date and to the knowledge of the author , no examination of the relation between AML regulation, crime prevention, criminal investigation and fundamental rights in the particular context of cryptocurrencies has been published. The third category encapsulates fundamental rights with a less obvious relation to cryptocurrencies. Cryptocurrency classics In every cryptocurrency system, users transfer data to one another. This transfer of data represents a transfer of value.

During this process, the scope of two fundamental rights can be affected: freedom of telecommunication i and the protection of personal data and private life ii. Since transferred data represents value, it is self-explanatory to take the right to property into consideration iii.

Moreover, the transaction of value always involves traders and investors. Therefore, the right to pursue a trade or profession has to be taken into account as well iv. Freedom of telecommunication The right to freedom of telecommunication is provided for in Art.

The Explanatory Note on Art. Hence, as Art. Any form of public communication does not fall within the scope of Art. Even if the receiving party of a Bitcoin transaction were considered as a specifiable addressee, the data in the blockchain remains public. Hence, the transaction data in the blockchain is not protected by Art. Data protection is mentioned specifically in Art.

Nevertheless, Art. Therefore, personal data is also protected by Art. Hence, the protection of private data is guaranteed by Art. In contrast to the scope of freedom of telecommunication, the scope of data privacy can include the protection of public data Art.

This can be concluded from the fact that Art. Applying these principles to public internet data like the data in the blockchain leads to the following classification: the mere browsing of and searching for data in the blockchain e.

It is not even necessary for the data to contain information about a natural or legal person. The information can concern an object, as long as this object is related to a natural or legal person para. Pursuant to Art. Similar to the discussion about IP addresses para. Moreover, it has to be taken into account that the transaction data in the blockchain is pseudonymized.

Hence, it cannot be solely used to identify the particular Bitcoin user. Nevertheless, the blockchain data can be combined with data sets from other sources e. Of course, the lower risk of de-anonymization lowers the legal obstacles to overcome when setting up legitimate grounds for data processing by law para.

The right to property [ 73 for a common law perspective] The right to property is laid down in Art. Therefore, the scope is not limited to moveable und immoveable physical objects para. Several immaterial pecuniary positions were regarded as being protected para. It seems to be difficult to determine whether holding bitcoins and other cryptocurrencies falls within the scope of the right to property.

On the one hand, the legal status of cryptocurrencies is one of the most controversial debates within this context. Considering the lack of materiality, cryptocurrency units are not chattels. Furthermore, they are neither a right nor a debt as it would require an obligee at least one on the one side and an obligor at least one on the other side [for German law: 84—86]. On the other hand, cryptocurrency units meet all criteria for the positions and assets protected by the right to property: first, bitcoins have a market value.

This is a strong argument to include bitcoins in the scope of the right to property because essentially the right to property protects definable units of value as a basis for freedom [for the right to property in the German constitution: 88]. Unlike other virtual goods like Linden-Dollar [ 8 ], p. This gives cryptocurrency units durability similar to other assets protected by the right to property. Third, cryptocurrency units are definable. To summarize, it can be stated that holding currency units like bitcoins should be seen as protected by the right to property [ 12 , 87 , ].

Therefore, the right to property has to be developed towards an all-encompassing protection concept for virtual assets. This gives rise to the question which kind of interferences with the right to property of bitcoin holders are conceivable.

Traditionally, interferences with the right to property are divided into three categories: deprivations of possessions expropriations , regulations to the use of property and other interferences with factual consequences Art. Deprivations of possessions can be sub-classified into legal and factual expropriations Art. An example of an expropriation is a complete or nearly complete; para.

Finally, it should be mentioned that those Bitcoin users who have their Bitcoins administered by a service provider e. The right to pursue a trade or profession The right to pursue a trade or profession is codified in Art. This conclusion can be drawn from the wording of Art.

Furthermore, the worker must exercise the activity for a certain amount of time. Once only and really short-term activities do not fall within the scope of Art. The scope of Art. Business can be defined as any independently conducted economic activity. Professional traders, investors and operators of exchange platforms as well as miners and operators of mining pools can rely upon the freedom to conduct a business as long as they conduct their business independently and the activity is profit-orientated.

Naturally, workers in such companies are protected by the freedom to choose an occupation and right to engage in work. Hence, any AML regulation concept actually any regulation concept which obligates companies or workers to check and monitor their business partners like KYC systems including due diligence and compliance means has to deal with those fundamental rights p.

In contrast to the classic banking system ran by governments, central banks and private banking institutes, the Bitcoin system consists of the entirety of users who participate voluntarily in the network e. The right to freedom of peaceful assembly and association is laid down in Art. The scope includes private meetings as well as public ones Art.

A political purpose is not required. Still, not every purpose is protected Art. While the economic motivation of most of the participants in the Bitcoin network could arguably fall within the scope of the right to freedom of assembly, the Bitcoin network is not an assembly for another reason: assemblies of natural persons in the real world need a special kind of protection in comparison to the freedom of speech because of the very special dangers caused by the physical presence of many people in one place.

The mere expression of an opinion without these dangers is protected by the freedom of speech. Hence, they do not fall in the scope of the right to freedom of peaceful assembly [ — ]. While economic associations are protected, public-law associations cannot invoke the right to freedom of assembly Art.

The unwritten consent of users, for example, is illustrated by the fact that any modifications of the Bitcoin protocol can only be adopted by consensus e. BIPs [ ]. In addition, there are elements of consensus between the participants of a Bitcoin transaction e. The Bitcoin network was set up and is operated by people on a fully voluntarily basis without any known influence from authorities.

Moreover, it does not enjoy any legal prerogatives. Therefore, the Bitcoin network can be seen as an association in terms of Art. The right to freedom of association protects the foundation of associations as well as the right to join an existing foundation. To date, it is not clarified whether actions of the association like the recruitment of members, the marketing of the association etc. Nonetheless, it is certain that specific work of the association without a close connection to the association itself like transferring bitcoins in the Bitcoin system is not protected by the right to freedom of association.

These actions are protected by the respective fundamental right Art. The personal scope includes natural persons as well as legal persons, especially the association itself Art. Keeping this in mind, it is evident that not every regulation concept collides with the right to freedom of association. However, any regulation concept that restricts the structure of the Bitcoin community itself or the access to the system especially a blanket ban of Bitcoin interferes with the right to freedom of association.

Some remarks on freedom of expression and freedom of information Basically, a transaction in the Bitcoin system is a transfer of information from the sender to the network including the recipient of the Bitcoin transaction. Whenever information is transferred, the right to freedom of expression and information could be affected. These fundamental rights are provided for in Art. Uttering facts, even if they are incorrect, are protected, too Art. The scope of protection of the right to freedom of information is embellished in a similar way: it protects sharing and receiving information and ideas of any kind, regardless to the form of the information or the means of distribution and the access to any publicly available information Art.

In summary, it can be stated that freedom of expression and information protects i the sending, ii the receiving of any content 15 of communication, any ideas and any information in any form and iii the access to any publicly 16 available information.

Sending and receiving information Prima facie, a Bitcoin transaction falls within the scope of both, freedom of expression and freedom of information, because it is a transfer of information from one subject to many others the network. However, it has to be taken into account that even though a bitcoin transaction transmits information, its primary purpose is to transfer value instead of communicative content.

When a message is transmitted or information is embedded in the blockchain using a transaction of bitcoins, this transaction clearly falls within the scope of the right to freedom of expression and information. But the question of whether a mere transportation of value using a transaction of bitcoins is protected by Art.

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But they have been hit by the GPU shortage. Earlier this year, there were reports that video gamers had been hit by a sudden rise in the cost of GPUs, thanks in particular to a rise in Ethereum mining , which can be done with chips aimed at consumers. At the time, major chip-maker Nvidia said that retailers should make arrangements to make sure gamers' demands were met. In a conference call last week, Nvidia's chief executive told investors the company was "working really hard" to "catch up with supply" and get GPUs to the marketplace.

A group looking for evidence of the earliest stars in the universe was recently shocked to see that the cost of the GPUs it wanted had doubled. Image copyright Aaron Parsons Image caption Prof Parsons at the Hera radio telescope array in South Africa It has been designed to listen to low frequency radio waves emitted by the reionising hydrogen gas that permeated the universe before the first stars and galaxies formed.

GPUs are needed in order to bring together data from Hera's many small radio telescopes - this synthesises a much larger array, offering an especially wide field of view peering out into the universe. Mining's meteoric rise Thanks in part to a recent boom in the price of crypto-currencies such as Bitcoin and Ethereum, mining crypto-currencies has never been more popular.

While Bitcoin miners have largely moved on to specialised "Asic" chips that have been designed from scratch to support mining, it's still possible to use GPUs on the Ethereum mining network to lucrative ends, according to cyber-security expert Matthew Hickey at Hacker House.

Image caption GPUs are often connected together to carry out the laborious task of crytpo-currency mining "[You can] use GPUs effectively to turn a small profit, you're not going to make millions but if you put 12 or 24 GPUs together, you'll make back the cost in six months," he told the BBC. This is a carousel. He says Bitcoin fever is hindering the search for extraterrestrials. July 17, , in Berkley, Calif. But recently it's become more popular with a different crowd: speculative investors.

The coins are created by users who "mine" them by lending computing power to verify other users' transactions. They receive bitcoins in exchange. The coins also can be bought and sold on exchanges with U.

Transactions can be made anonymously, making the currency popular with libertarians as well as tech enthusiasts, speculators — and criminals. Transactions and accounts can be traced, but the account owners aren't necessarily known. However, investigators might be able to track down the owners when bitcoins are converted to regular currency.

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