Does the gospel of the blockchain concept and the technology that supports it, fully solve the overall problem of illegitimate remittances of criminal and terrorist organizations?
If not, what are the problems?
The concept of blockchain and the technology that supports it sharply improve the capabilities of banking systems to track illegitimate financial activity, especially with regard to the ability to monitor the transfer of international funds that include a number of staging points. The ability of the blockchain to track the path of money in real time, allows researchers from the fields of financial warfare in criminal organizations and financial researchers in terrorist organizations, deepening the financial sources of terrorist organizations and the financial channels used by them. In this respect, the concept of the “blockchain” has undoubtedly revolutionized the traditional banking world. Thus, it is not inconceivable that the volume of remittances to illegitimate activities will be reduced, and at the same time, remittances through non-bank channels will become the main arena for illegitimate remittances.
There is no doubt that criminal organizations and terrorist organizations understand the streamlining of the banking system. Therefore, creative and challenging thinking is required of the public sector, including mainly the intelligence bodies, and at the same time, the private sector, including business institutions, which are not part of the banking system, which may be exploited given the opening of the “blockchain” system to accompany banking activity.
In our opinion, the main phenomena that will characterize the reactions of the financiers of the criminal organizations and terrorist organizations will be –
Investment of time resources and budgets for in-depth planning, of criminal and terrorist elements and especially in the international medium, for the transfer of significant funds from country to country.
Initiated distance of the financial systems of criminal organizations and terrorist organizations, from the banking channel for international transactions, and at the very least, changing the methods of transferring funds in the banking channel – the volume of funds, insistence on transferring funds through several transit stations and more.
A sharp shift of terrorist and criminal organizations to international money transfers through virtual currencies, money changers, a sophisticated courier system, the transfer of goods as a substitute for money, the exploitation of an online gambling system.
The increase in the use of darknet as a platform for the purchase of non-legitimate goods includes payment for the goods while utilizing technologies that will be developed in the future in this medium.
By Ilan Lochofff, August 15, 2020
HLS & Counter Terror Financing – CTF