“One cannot send a bank transfer to a mujahid or suspected mujahid,” lamented the author of the post, “without [foreign] governments” becoming “immediately being aware.”
To bankroll jihadists fighting holy war in Iraq or Syria, the author proposes that, would-be funders download the encrypted DarkWallet once it becomes available for download.
“DarkWallet is a new Bitcoin wallet designed to completely hide the activities of its users, providing total online anonymity. It eliminates government regulation that tries to identify Bitcoin through associating them with an individuals wallets,” the author wrote.
The post has since been removed from the site, but is still available here.
The author cites the broader decentralized Bitcoin system as the perfect way to disguise large-scale transactions without giving away the locations or identities of the sender and receiver. In the past, intelligence agencies like the CIA would track international money transfers to spot potential Al Qaeda funding networks. But in the digital landscape, Bitcoin transactions might slow down agents hot on the trail of foreign IS sympathizers donating cash to the movement.
It's not a novel idea. In February, the Canadian federal budget cited Bitcoin among several potentially illicit money laundering activities, saying that "virtual currencies, such as Bitcoin, [could] threaten Canada’s international leadership in the fight against money laundering and terrorist financing.” Meanwhile, the US Department of Defense commissioned a study in May to look into Bitcoin's potential ability to be used to finance militant organizations.
The author of the blog post is also aware of Bitcoin’s history and link to Silk Road. According to the alleged IS-linked jihadist, the online market place can “potentially be used for anything from purchasing weapons to donating to mujahideen,” though the author admits most people used Silk Road "to intoxicate themselves.”
All this is based on one report—I haven't yet been able to authenticate the blogger's identity or confirm whether or not he's actually affiliated with IS (nor have other outlets). Whether the terror group is actually encouraging the use of the digital currency or the DarkWallet platform remains unknown. Many suspected online jihadists fighters I keep tabs on have yet to tweet the article or post it elsewhere, and Pando Daily says there are question marks about the authenticity of the blogger.
That being said, IS using Bitcoin isn’t a shocking proposition if you’ve been following the group's online tactics of late. Not only has the jihadist outfit used Twitter and other social media as a means of recruitment, social media has become its go-to platform for psychological warfare, with gory beheadings and pictures of its operatives' rapid advancement across Iraq.
The group and other jihadists in the region, has a sophisticated knowledge of Tor and encrypted messaging services like Surespot, proving they’re true millennials. Adding Bitcoin to their bag of tricks wouldn’t be a stretch.
“It is highly unlikely that Bitcoin will replace hard currency anytime in the near future,” Evan Jendruck, an analyst at IHS Jane's Terrorism and Insurgency Centre, told me. “I think what is significant about the story is that it again underlines IS' attempts to change the game, so to speak. It has already revolutionized the way militants groups use social media. Imagine if it could do the same with the way groups are funded? It would be a huge advantage.”
Whether it's actually worth the organization's while to use Bitcoin is up for debate at this point. It's already reportedly flush with cash, but a little more of the digital variety probably couldn't hurt.