The Islamic State (IS) is now pushing for cryptocurrency use to fund its operations, but with a catch: they want it to be Sharia-compliant.
A Shift in Strategy
This is a surprising change because Sharia law, the Islamic religious law, has traditionally been against cryptocurrency. The UN’s latest report reveals that IS associates are demanding Sharia compliance checks for the digital assets they increasingly rely on.
To facilitate these transactions, IS has even set up special channels on Telegram, like CryptoHalal and Umma Crypto, offering guidance to its members on crypto transfers.
Finding Common Ground
So how is IS trying to reconcile Sharia law with cryptocurrency? The UN report suggests that IS is seeking compromises to make crypto more compliant. They might be pushing for stricter rules and monitoring to ensure that the funds are not used for illegal activities or to support terrorism.
Implications for the Crypto Industry
This shift could have major implications for the entire cryptocurrency market. As more terrorist groups and other illegal entities try to use digital assets, there might be a greater demand for increased control and monitoring of the crypto ecosystem.
This could lead to stricter Know Your Customer (KYC) and Anti-Money Laundering (AML) policies for exchanges, wallet providers, and other cryptocurrency service providers. This could increase compliance costs and potentially limit access to cryptocurrencies for legitimate users.
A Cause for Concern
The rise of IS’s demand for Sharia-compliant crypto highlights the ongoing efforts of terrorist groups to exploit digital resources for their malicious purposes.
Regulators, law enforcement, and industry players need to work together to mitigate the risks of terrorist funding and other illegal activities as the crypto sector continues to grow. This UN report serves as a reminder of the importance of maintaining a secure and robust crypto environment that is resistant to misuse by bad actors.
