Chairman Pearce, Vice Chairman Pittenger, and Ranking Member Perlmutter, on behalf of the Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance, thank you for the opportunity to testify today about a crucial technology that provides virtually unlimited opportunities but also certain threats.
Cryptocurrencies may become the way we transact in the future. But they are also becoming part of the illicit financing toolkit available to terrorists. 1 FDD’s Center on Sanctions and Illicit Finance (CSIF) has now documented cryptocurrency fundraising campaigns run by social media entities associated with the Islamic State and al-Qaeda. Although public evidence indicates that terrorist groups have had only limited success so far with cryptocurrency fundraising efforts, the rising profile of digital currency has been accompanied by jihadist networks 2 experimenting with them more frequently. By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance. I will conclude my testimony today with specific recommendations for how the federal government and the private sector can address this challenge.