- Singapore’s terrorism threat assessment underscores cash as the main funding method for terrorist activities, despite rising cryptocurrency use.
- ISIS primarily uses cash couriers and informal transfer systems for funding, with cryptocurrency playing a minimal role.
- Singapore enhances regulations to combat terror financing, elevating risk levels for crypto platforms.
Singapore’s latest internal security investigation has unveiled persistent reliance on cash transfers as the primary method of fundraising for terrorist activities, with cryptocurrency adoption among these groups remaining relatively low. This finding comes from the terrorism threat assessment report for 2024, released by the Internal Security Department of the Ministry of Home Affairs on July 25.
Traditional Funding Methods Prevail
Despite the growing global trend of utilizing digital currencies, traditional methods like cash couriers and informal value transfer systems, known as hawala, continue to dominate terror financing. The report particularly notes that the Islamic State in Iraq and Syria (ISIS) still heavily relies on these conventional means to receive funding. These methods are preferred due to their ability to bypass regulated financial networks, which can be monitored and controlled.
While there has been an observed increase in cryptocurrency use among various Islamist terrorist groups for fundraising purposes, it remains a minor component compared to the extensive use of cash transfers.
Digital Threats and Regulatory Responses
Amid global instability, the report emphasizes an elevated terrorism threat to Singapore, with online self-radicalization posing a significant challenge. This online threat is often propagated by supporters of terrorist organizations like Hamas, highlighting the complex and evolving nature of terror threats that extend beyond physical attacks to digital radicalization and recruitment.
In response to these threats, Singapore’s Monetary Authority of Singapore (MAS) has updated its regulations, increasing the risk level associated with crypto exchange platforms from medium-low to medium-high. This adjustment is part of broader efforts to prevent terrorist organizations from exploiting Singapore’s economic infrastructure for terror financing.
Enhanced Oversight and International Cooperation
The report’s findings serve as a critical reminder of the need for stringent oversight and robust regulatory frameworks to combat the financing of terrorism. By increasing surveillance on potential digital finance pathways and continuing to crack down on informal cash transfer systems, Singapore aims to safeguard its position as a major international financial, business, and transport hub against the misuse by terrorist networks.
