Islamic State ventures into NFTs to spread its terrorist messages and propaganda Analysts see it as a potential vector for recruitment and funding

The first known case of a non-fungible token (NFT) created and shared by a terrorist sympathizer has come to light, raising concerns that the immutable nature of blockchain technology could help spread terrorist messages and propaganda.

NFTs, like cryptocurrencies, are transactions stored on the blockchain. But the difference is that an NFT, which is a non-fungible token, is not fungible, unlike cryptocurrencies. A bitcoin will always be equal to another bitcoin, we can exchange them, they all have the same value. The same goes for euros: it’s what we call the fungible property of money. The creators of NFT wanted to do the exact opposite: a transaction stored on the blockchain that is non-functioning, and therefore completely unique. The idea is to be able to use it as a certificate of authenticity associated with a digital or physical object.

Yet a simple digital map praising Islamist militants for an attack on a Taliban position in Afghanistan last month is the first known non-replaceable token created and distributed by a terrorist sympathizer, according to former senior US intelligence officials.

According to an article published Sunday by the Wall Street Journal (WSJ), intelligence experts said the NFT could be a sign that the Islamic State and other terrorist groups could also use blockchain technology to evade sanctions and raise funds for their terrorist campaigns. .

The NFT in question was allegedly discovered by Raphael Gluck, co-founder of US research firm Jihadoscope, who discovered the NFT through pro-ISIS social media accounts.

Named IS-NEWS #01, the digital token would be an image bearing the Islamic State emblem with text praising Afghanistan-based Islamist militants for attacking a Taliban position.

Mario Cosby, a former federal intelligence analyst specializing in blockchain currencies, said the user created two more NFTs on Aug. 26: one shows an Islamic State fighter teaching students how to make explosives and the other smoking tobacco. condemns cigarettes.

A screenshot of IS-NEWS #01 NFT (left)

Regulators and US national security officials have expressed concern about terrorists’ ability to exploit new technologies and financial markets, including NFTs.

At the moment, IS-NEWS #01 does not appear to have changed, but its presence on the blockchain makes it nearly impossible for the Attorney General to remove it from the internet. An NFT is in fact stored on a blockchain, a database of transactions that is organized in such a way that there is no need to call on a central authority. Transactions on NFT markets can be done under a pseudonym, which makes it more difficult for authorities to trace them. There’s really no way to take this NFT down, continues Mario Cosby.

It’s really an experience[] then find ways to make the content indestructible,” Gluck said.

The digital token was reportedly listed on the NFT OpenSea marketplace, but the company quickly removed the listing and closed the poster account, citing a “zero tolerance policy on incitement to hatred and violence”.

The trio of NFTs were also reportedly featured on the NFT Rare Marketplace and several others before being taken down.

Security experts have already expressed concerns about the future potential for terrorists to exploit emerging technologies and markets, including NFTs, to fund attacks.

It was only a matter of time, Yaya Fanusie, a former Central Intelligence Agency economics and counterterrorism analyst, told the Wall Street Journal, predicting a generalization of the practice by the terrorist organization. So far, Western authorities have paralyzed other Islamic State financial channels, including shutting down fundraising and propaganda websites. Social media platforms are also responding better to calls from lawmakers to censor posts that violate their code of conduct, the Wall Street Journal analyzes.

In February, the US Treasury Department released a study highlighting the growth of the NFT market as a potential concern.

Quote Send by US treasury department

The US Treasury Department today released a study on facilitating money laundering and terrorist financing through the trade in high-value works of art. This study examined art market players and high-value art market sectors that may pose a money laundering and terrorist financing risk to the U.S. financial system, and identified efforts that government agencies, regulators and market participants could take to further reduce money laundering. The study was mandated by Congress in the Anti-Money Laundering Act of 2020.

High-quality art has a number of inherent characteristics in the way it is bought and sold and certain market players can make the high-quality art market attractive for money laundering by criminals. These include the high value of transactions, the transportability of goods, a long-standing culture of privacy and the use of intermediaries (e.g. shell companies and art consultants), and the increasing use of high-quality art as an investment class.

“As we address systemic challenges, such as corporate transparency and other loopholes that allow criminals to abuse the U.S. financial system, we will explore what may be needed to address specific money laundering risks in other industries, including the art industry,” said Scott Rembrandt, Deputy Assistant secretary for strategic policy at the Bureau of Terrorist Financing and Financial Crimes.

The investigation showed that although there were indications of a risk of money laundering in the high-quality art market, there was little evidence of a risk of terrorist financing. The most vulnerable participants in money laundering in the art market are companies that offer financial services, such as loans secured by works of art, but which are not subject to extensive anti-money laundering obligations. . Asset-based loans can be used to hide the original source of money and provide cash to criminals.

Entities with lower annual revenues (such as small galleries) and entities that only occasionally engage in high-value art transactions (such as third-party online marketplaces, museums, and other non-profit organizations) may be at lower risk, while entities that have higher annual revenues and Regularly entering into high-quality art transactions in the context of normal business operations may entail a higher risk. In addition, the emerging digital arts market, such as the use of non-fungible tokens (NFTs), may introduce new risks depending on market structure and incentives..

In March, Israeli authorities seized a set of 30 crypto wallets from 12 exchange accounts linked to Hamas, a militant group in the Gaza Strip. Israel has claimed that 12 accounts of crypto exchange al-Mutahadun have been used by Hamas leaders to fund terrorist efforts against the nation. The Times of Israel reported that Israel’s Defense Ministry said Mutahadun had helped Hamas’s armed wing by transferring tens of millions of dollars a year.

The exact value of the seizures and the specific crypto assets seized have not been released*; However, Israeli officials believe Hamas is using tens of millions of dollars in crypto to fund its weapon. In a statement, Israeli Defense Minister Benny Gantz said: “We continue to develop our tools to tackle terrorism and the companies that provide it with the economic oxygen pipeline.”

Last April, Matthew Levitt, director of the Jeanette and Eli Reinhard Counter-Terrorism and Intelligence Program at the Washington Institute for Near East Policy, said that while cryptocurrencies have been linked to several terrorist financing cases, they have not yet become a major financing tool for terrorism.

Sources: The Wall Street Journal, US Treasury Department, Times of Israel, Israel Ad

And you?

What do you think in absolute terms of NFTs? are you interested (in creating or buying) or not at all?
How do you read this use case?

Also see:

The company behind Bored Ape Yacht Club is suing concept artist Ryder Ripps for selling duplicates of his Bored Apes NFTs
With Ubisoft Quartz, the eponymous publisher becomes the first major video game player to integrate NFTs into one of its titles. 95% of the votes on the YouTube ad were for ‘dislike’

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