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Financing Sources from GoFundMe to Bitcoin Fatten Jihadists' More Diverse Portfolios

WASHINGTON -- Seventeen years after the 9/11 attacks on America, al-Qaeda has moved from relying on external donations to more diversified sources of financing -- so have ISIS as they've lost territory but not their fundraising power.

At a House Financial Services Subcommittee on Terrorism and Illicit Financing hearing Friday, Washington Institute for Near East Policy fellow Katherine Bauer explained that "a number of dynamics" underlie the changes in terror financing, "including counterterrorism efforts broadly and counter-terrorist financing efforts specifically, but also the breakdown of political systems and the proliferation of ungoverned spaces that have allowed terrorist organizations to increasingly hold territory, to tax and extort the local population, and to even control, extract and sell resources."

"Terrorist organizations have also capitalized on trends of globalization that facilitate even greater movement of ideas, people and funds. Disrupting foreign sources of financing alone, therefore, will not bankrupt such groups. As terrorist financing methodologies evolve, responses from the international community to counter such threats must also adapt," she said. "Despite the fact that many terrorist organizations appear better-resourced than ever before, counter-terrorist financing remains a valuable endeavor."

Despite ISIS losing most of its old caliphate territory, Bauer told lawmakers that ISIS "remains well-resourced, able to pay salaries and send funds abroad to its affiliates as well as mount attacks."

Yaya Fanusie of the Foundation for Defense of Democracies' Center on Sanctions and Illicit Finance said cryptocurrencies such as Bitcoin "are also becoming a part of the illicit financing toolkit available to terrorists" and "multiple jihadist cryptocurrency fundraising campaigns on social media" have been documented.

"Cold hard cash," he explained, "is still king, but jihadist groups are building diverse portfolios."

"There are enough case studies of jihadist groups experimenting with cryptocurrencies to suggest that law enforcement and the intelligence community must prepare for terrorists to try to exploit digital tokens as the technology spreads," Fanusie added.

Oren Segal, director of the Anti-Defamation League's Center on Extremism, told the committee that over the past decade domestic extremists "of all kinds" have killed at least 387 people in the United States. Of those, 71 percent were committed by right-wing extremists such as white supremacists and anti-government extremists.

"Unlike some foreign terrorist organizations that receive large amounts of financial resources from state sponsors, extremist movements in the United States are generally self-funded," Segal said. "...Recent advancements in online funding and social media usage have provided white supremacists with more fundraising and recruitment opportunities. White supremacists quickly discovered for themselves the usefulness of these dedicated social media Internet platforms like GoFundMe, Kickstarter and others."

He added that "while these companies need to police their own platforms, there is a role for civil society and government," including using "their bully pulpit to send loud, clear and consistent messages that hatred and violent extremism is unacceptable" and to "urge tech companies to continue to provide and improve their terms of service and rigorously enforce their own guidelines."