The Institute of Certified Public Accountants of Cyprus (ICPAC) has urged accounting and auditing professionals to play a crucial role in detecting and preventing terror financing.
This alert highlights five primary methods terrorists use to transfer funds, including cryptocurrencies.
ICPAC, which regulates the accountancy profession in Cyprus, issued a “terror financing alert” to enhance efforts against such activities.
While law enforcement agencies usually handle financial crimes such as money laundering and terror financing, ICPAC emphasizes the need for accounting professionals to participate in monitoring. The regulator stated:
“These days, given the nature of services provided and the role of professionals as gatekeepers, it is a requirement for obliged entities to take an active role in the prevention phase.”
ICPAC identified five fund transfer methods used by terrorists: donations through nongovernmental organizations (NGOs), cash, bank transfers and gift cards, cryptocurrencies, and shell companies.
Regarding cryptocurrencies, ICPAC advises accountants to watch for anonymous cross-border peer-to-peer transfers, crowdfunding, charitable donations, and anonymous online fundraising campaigns.
ICPAC instructed its members, firms, and compliance officers to report suspicious activities, warning that failure to do so constitutes an offense.
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Consequently, flagged transactions will undergo thorough scrutiny, including profiling individuals, screening crypto wallets and transactions, and using specialized blockchain tools.
A U.S. Treasury official revealed that Palestinian militant groups, including Hamas, used small amounts of cryptocurrencies for funding but preferred traditional financial methods.
Blockchain analytics firm Elliptic confirmed that Palestinian Islamic Jihad raised $12 million through crypto fundraising, contradicting a Wall Street Journal report that initially claimed they received between $41 million and $93 million from August 2021 to June 2023.
Elliptic found no evidence of such high amounts raised through crypto, prompting the Journal to correct its report.
“To be clear,” Representative Tom Emmer asked the Treasury’s Undersecretary for Terrorism and Financial Intelligence Brian Nelson, ”Hamas is using crypto in relatively small amounts compared to what’s been widely reported, that’s correct?”
“That’s our assessment, yep,” Nelson confirmed.
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