“What keeps me up at night when I am thinking about digital currency…the real threats out there, these days we’re thinking a lot about ISIL,” Calvery said. “How they’re moving their money, and how potential US-based individuals are becoming foreign fighters: Are they moving their money, can we identify them from the movement of their money? What does it mean if they start moving their money through bitcoin? We’ve started to see some public articles suggesting that has occurred.”
Indeed, last summer Sky News reported that one pro-ISILblog discussed using bitcoin to fund the militia’s attempts to impose its extreme view of Islamic law on Syria and Iraq. It’s not clear yet if bitcoin is, or ever will be, a significant part of the group’s fundraising, which is largely reliant on cash from hostage ransoms and illegal oil sales. But the ability to move cash around national borders could help the organization finance attacks in the West, just as an Al Qaeda group in Yemen apparently funded the Charlie Hebdo attacks in France. And bitcoin—transparent in its reporting of how much got transferred when, but lacking the intermediaries to report suspicious activities the way the regulated banking system does—provides a lot of cover for anyone who wants to move money around without triggering the usual alarm bells associated with giant transfers of cash.