Government agency Australian Transaction Reports and Analysis Centre states that “electronic, online and new payment methods” are used by terrorist groups to transfer funds to affiliates or other groups offshore.

Australia is currently reviewing a number of anti-money laundering and terrorism financing laws. The new report by AUSTRAC entitled “Terrorism Financing in Australia 2014” claims that financial technologies are increasingly used by criminal organisations.

“Online payment systems may be used to collect donations and transfer funds to extremists in Australia and overseas. The use of online payment systems may correspond with the use of social media by terrorist groups and extremists to radicalise, recruit and communicate with sympathisers,” agency claims.

AUSTRAC also points out that a number of online payment systems and digital currencies are anonymous by design, which makes them attractive for terrorist financing.

“While digital currencies have undoubted legitimate uses, the transfer of convertible digital currencies can occur without passing through the formal financial sector…this provides another tool for criminals and terrorist financers to move and store illicit funds beyond the reach of law enforcement,” the report states.

Experts, however, were not able to provide a direct evidence of bitcoin used for financing terrorist groups, although the agency’s manager for strategic intelligence and policy, Brad Brown, pointed to some of the best-known cases of bitcoin "abuse", such as collapsed cryptocurrency exchange Mt. Gox and online black market Silk Road.

Australian Minister of Justice Michael Keenan noted that “the report recommends strengthening an already robust legal framework to respond to new and emerging threats…the government is committed to facilitating growth and innovation in this sector and appropriate anti-money laundering and counter-terrorism financing regulation will aid that development.”

AUSTRAC is a government organisation created in 1989 to combat money laundering and financing of terrorism. Earlier, the country’s authorities declared the intention to change the legislative status of cryptocurrency by the end of 2016 and solve the problem of double taxation to demonstrate the openness of innovation in the financial technology.

Lena Gabdullina