In early October the U.S. House of Representatives’
Homeland Security Committee Chairman Michael McCaul (R-TX) released a
comprehensive report entitled “Cash to Chaos:
Dismantling ISIS’ Financial Infrastructure” that analyzes potential
key factors behind ISIS’s explosive growth over the past several years. The report
identifies in the terrorist group’s significantly diverse sources of income
coupled with its effective control of the territory the reasons for its enduring
financial resilience in spite of multilateral efforts to disrupt its funding mechanisms. In addition to revenues
from black market oil and gas, black market commodities, antiquities, extortion, kidnapping and ransom, taxation, robbery, and “Gulf State Support”, one noteworthy financing technique discussed in the report is ISIS’ extensive
use of the Internet for donations and crowdsource funding. Further to their use of social media platforms for fundraising, ISIS supporters have embraced crowdsourcing
tools such as Paypal, GoFundMe, and CASHU that bypass formal financial systems
controls. According to the report, prepaid
cards were and continue to be used in exchange for cash, where ISIS coordinates
drop offs by using Whatsapp or Kik messenger. Notably, in early 2015 Ali Shukri Amin, a 17 year old Virginia-based student, was arrested for instructing his Twitter followers on how to use Bitcoin and Dark Wallet to mask ISIS donations.
order to address the existing information gap about “the
extent to which terrorist groups like ISIS are using online fundraising
platforms to generate income”, the House Homeland Security Committee recommended close
cooperation between the U.S. Department of the Treasury, social media
companies, and the technology industry. Such task force would generate a public
report aiming to raise awareness about terror financing
and to “help improve collaboration between
various stakeholders.” If certainly helpful towards a better assessment of the
magnitude of the phenomenon, the suggested study cannot be enough. Any serious
effort at disrupting ISIS’ crowdsourcing capabilities through social media
cannot leave out a broader, collective discussion on legal responsibilities of
and future efforts by the stakeholders involved.
From Cash to Chaos:
Dismantling ISIS’ Financial Infrastructure:
of the Committee’s Review
U.S. Government lacks a national strategy to counter ISIS and similar terror
groups’ fundraising tactics. […]
Obama Administration has weakened America’s no-negotiation stance toward terrorist
groups who kidnap U.S. persons. […]
U.S. Government lacks clarity about the extent to which terrorist groups like ISIS
are using online fundraising platforms to generate income….
ISIS has been able to withstand targeted sanctions because few countries
Many foreign countries rely on a patchwork system to share expertise and
prosecute terror-related financial crimes, increasing the odds that terror
financiers will slip through the cracks.
Domestic and international law enforcement agencies have not put high-enough priority
on tracking black market sales of cultural artifacts and antiquities, which
have become a significant source of terrorist revenue.
U.S. Government does not have standardized internal controls in place across federal
departments and agencies to prevent terrorists from using charities,
nongovernmental organizations, non-profits, and humanitarian groups to raise
and move money covertly.
Gaping weaknesses in reporting and oversight standards for hawala transactions hamper
efforts to identify ISIS financiers and hold financial institutions
ISIS has been able to adapt to battlefield setbacks and generate new sources of
revenue to support the group’s mission.
ISIS continues to receive financial assistance from supporters in permissive
Gulf State countries.”