As the value of digital currencies surged towards the tail-end of 2017, it wasn’t just honest investors who were celebrating. Extremist groups the world over have made massive profits thanks to the unprecedented rise in the value of cryptocurrencies.
According to Heidi Beirch, Director of the Intelligence Project at the Southern Poverty Law Center, alternative currencies such as Bitcoin have enabled such groups to raise and transfer money (not to mention spend it) at a speed that has never before been witnessed. The Intelligence project has been monitoring over 200 Bitcoin wallets belonging to alt-right members and has discovered that some of them have been raking in massive sums as a result of their Bitcoin investments – money which will only be used to fund their vile activities.
While neo-Nazi sympathisers, white nationalists and other groups associated with the alt-right scene have been at the centre of the Project’s investigations, they are not the only extremist groups profiting from the spike in Bitcoin’s fortunes.
Several groups supporting Islamic State have also been able to fund their activities thanks to the revenue they have been generating from their Bitcoin investments. One reported incident from a jihadist Telegram channel in Germany confirmed that their organisation had raised enough money through altcoins to reward its cells of hackers and cyberterrorists with new computer equipment.
Why is Bitcoin and its competitors so attractive to these fringe groups? Doubtless part of the appeal is the speed with which profits can be made. With the value of Bitcoin rocketing in the last six months, even a modest investment would have resulted in an impressive return for hate-groups on both sides of the political spectrum. Added to that is digital currencies anti-establishment ethos (that of taking control of finance away from banks and other traditional institutions) combined with the essential anonymity of transactions committed through the blockchain.
Whilst some countries hope to clamp down on the use of Bitcoin for such activities, they might find it a difficult battle to fight, since the lack of governmental regulation is a large part of the cryptocurrency’s appeal and, indeed, the very basis of its rapid growth.