Anti-Defamation League Report: Extremists Turn to Crypto

• Crypto Funding for Extremist Groups in the U.S
• The Role of Cryptocurrencies
• Transaction Tracking
• Crypto Companies and Regulations
• The Stance of Crypto Exchanges
• Traditional Financial Systems vs Crypto

Crypto Funding for Extremist Groups in the U.S

The Anti-Defamation League (ADL), a New York-based advocacy organization that advocates against antisemitism and extremism, has reported that white supremacist groups in the U.S have obtained funding through cryptocurrencies. Their study scrutinized roughly $140,000 in transactions associated with 15 extremist groups or individuals in the past year.

The Role of Cryptocurrencies

Researching the movement of bitcoin, the ADL noted that a variety of digital asset platforms are utilized to fund hate groups. However, the report did not suggest that these funds were used directly for illegal activities, such as domestic terrorism. Bitcoin$42,260 -0.64% transactions from supporters were often converted back into the traditional financial system through U.S. banks.

According to the report from the ADL's Center on Extremism, Cryptocurrency has attracted the attention of extremists due to the misconception that the technology provides anonymity and cannot be deplatformed. Neither of these assumptions are accurate, but extremists have capitalized on the soft regulations of cryptocurrency platforms, which often permit extremists to use their services.

Transaction Tracking

Approximately half of the transactions tracked by the ADL were made through the U.S. exchange Kraken, with others processed through Binance, Coinbase and similar platforms. The largest recipient was identified as Counter-Currents, a white nationalist publishing house.

Crypto Companies and Regulations

To mitigate the use of cryptocurrencies in supporting hate and extremism, the ADL suggests crypto firms amend their policies. The organization also proposed that regulators should restrict tokens designated to protect privacy.

The ADL emphasized that Persistent supervision in the cryptocurrency space, alongside responsible moderation by the platforms themselves, is crucial to fight the financial aspects of this rise in antisemitism, extremism, and hate.

The Stance of Crypto Exchanges

In response, crypto exchanges like Kraken and Coinbase have defended their policies. Kraken expressed disappointment that the ADL's report was written without any dialogue regarding its know-your-customer policies and protections against money laundering. Coinbase's Chief Policy Officer, Faryar Shirzad, stated that the U.S. exchange operates under clear rules regarding anti-money laundering and sanctions that apply to both fiat and crypto.

Traditional Financial Systems vs Crypto

While crypto firms maintain their stance against illegal activities, extremist groups continue to leverage the traditional financial system, from online payments to credit cards to bank accounts. Notably, these traditional systems lack the transparency provided by the ADL's review. Nevertheless, excluding such groups from mainstream financial networks raises concerns regarding censorship.

Edited by Jonathan Stoker