Why Daesh terrorists are getting into NFTs

The Islamic State has uploaded its first NFT. Experts believe that the terrorist organization Daesh plans to use the blockchain as a propaganda tool and a new means of financing.

The Islamic State, the terrorist organization also known as Daesh, is turning to the non-fungible token (NFT) market. Quoting former senior US intelligence officials”, the Wall Street Journal reveals the presence of an NFT entitled “IS-NEWS #01″ on several platforms for the exchange of digital works. The token notably appeared on Rare and OpenSea.

© Wall Street Journal

The NFT bears the emblem of the Islamic State, namely the seal of Muhammad. There is also text in Arabic praising a terrorist action against the Taliban. According to information from the Wall Street Journal, the NFT has been uploaded by a supporter of Daesh. It would be an experiment aimed at testing a new outreach and fundraising strategy”.

“It’s really an experiment in finding ways to make content indestructible”advances Raphael Gluck, co-founder of the American research company Jihadoscope, at the origin of the discovery of the NFT.

The same Internet user posted the NFT of a bomb making tutorial and an anti-smoking warning. Indeed, the Islamic State formally prohibits the cigarette. The NFT IS-NEWS #01 has not yet been exchanged for cryptocurrencies. It is also not available for sale.

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NFTs, a propaganda tool for Daesh?

Questioned by the Wall Street Journal, intelligence specialists believe that IS-NEWS #01 is the first in a long series of NFTs touting Islamist ideology. According to them, blockchain technology, on which NFTs are based, is a propaganda tool of choice for terrorists. Indeed, the blockchain is resistant to censorship. It is therefore impossible to erase the works stored there.

“It’s as censorship-proof as it gets. There really is nothing anyone can do to remove this NFT”explains Mario Cosby, a former federal analyst specializing in blockchain and cryptocurrencies.

Unsurprisingly, exchanges reacted to the discovery of NFT. OpenSea, the industry’s best-known marketplace, has deleted the user’s account and the NFT. The platform to have set up a zero-tolerance policy for content that incites hatred and violence”. We also noticed that the NFT is not accessible through the search engine on Rarible.

However, these measures are not enough to stem the spread of content. Once registered on the blockchain, NFTs cannot be deleted without the consent of the owner. It is only possible to reduce its visibility. Some decentralized protocols, like the InterPlanetary File System (IPFS), are also capable of storing NFTs on several nodes (servers). This decentralized approach prevents a third party from making content disappear. Moreover, the owner of IS-NEWS #01 took care to register his non-fungible token on IPFS, underlines the investigation of the Wall Street Journal. It is therefore impossible to make it disappear.

According to the Wall Street Journal, Daesh officials are looking alternative financing solutions following the closure of several fundraising websites. This is why some proponents would take a keen interest in blockchain. With NFTs, terrorists may have found a new way to hoard funds under the nose of the authorities, intelligence specialists warn.

The financing of terrorism thanks to cryptocurrencies?

Note that the Islamic State has already been using cryptocurrencies to finance itself since the beginning of the 2010s. As early as 2015, analyzes showed that Daesh had managed to constitute a large crypto-asset war chest, including Bitcoin. In 2015, a wallet held by the Islamic State would have collected 23 million dollars in one month, reports the German media Deutsche Welle. A survey carried out by the New York Times in 2019 shows that many other terrorist groups also rely on cryptocurrencies. This is the case of Hamas, a Palestinian Islamist movement.

Transactions through most blockchains are easily traceable. De facto, the authorities can easily trace the history of transactions, and determine which wallets sent funds. On the other hand, the authorities are unable to freeze the assets. Unlike money held in a bank account, cryptocurrencies on the blockchain cannot be frozen or seized by law enforcement.

Crypto-assets therefore remain assets for criminal organizations, such as Daesh. Nevertheless, terrorist financing represents a tiny part of transactions on blockchains. As a study by CipherTrace, a company specializing in blockchain analysis, points out, illicit activities accounted for only between 0.10% and 0.15% of all cryptocurrency transactions in 2021.

Most of the financing of terrorist groups goes through fiat currencies, such as the dollar or the euro. As Sigal Mandelker, former Secretary General of the Treasury in the United States, explained in 2019, most terrorist groups mainly rely on the traditional financial system and cash to transfer their funds ». For example, the Islamic State finances itself through oil, gas, speculation on Middle Eastern currency markets, agriculture and taxes imposed on the population. In this context, Daesh mainly recovers cash and raw materials.

Source :

Wall Street Journal

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Why Daesh terrorists are getting into NFTs

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