How Terror Networks Abuse Digital Tools

Terror networks abuse digital tools like encrypted messaging apps, social media, and cryptocurrency for recruitment, propaganda, fundraising, and coordination, posing serious challenges to global security and counter-terrorism efforts.

Table of Contents

Context: The “Comprehensive Update on Terrorist Financing Risks” report from the Financial Action Task Force (FATF) reveals that e-commerce platforms and online payment services are being misused for financing terrorist activities.

Platforms Used by Terrorists for Financing Activities

E-commerce Platforms: Terrorists abuse online marketplaces for operational procurement (equipment, weapons, chemicals, 3D-printing materials).
- Use over-/under-invoicing, posing as buyers/sellers to move funds.
- Trade in low-value goods, wildlife, or stolen artefacts to generate and transfer funds.
Online Payment Services: Use of digital wallets, payment gateways, and platforms like PayPal for pseudo-anonymous transfers.
- Attractiveness increases in jurisdictions with lax regulation.
Social Media & Messaging Applications: Integration of e-commerce and payment functions allows direct transactions without leaving the app.
- Used for fundraising, propaganda, and selling/buying goods linked to terror finance.
Crowdfunding Sites: Raising funds under false pretences (e.g., fake charities or causes) that are redirected for terrorism.
Virtual Assets & Blockchain: Cryptocurrencies and blockchain-based transfers offer pseudo-anonymity and global reach.
- Exploited for fundraising and cross-border transfers.
Informal Mechanisms: Cash couriers, hawala networks, and money mules remain widely used, especially in regions with weak financial oversight.
Legal Entities: Shell companies, trusts, and certain non-profit organisations are used to obscure fund flows and bypass scrutiny.

FATF Recommendations To Stop it

Address Transnational Risks: Promote international cooperation to tackle cross-border terror financing, as digital platforms transcend national boundaries.
- Prioritise multilateral designation of terrorist organisations (e.g., under UN Security Council sanctions).
Expand Regulatory Oversight: Bring social media, messaging platforms, and e-commerce services under the scope of AML/CFT (Anti-Money Laundering/Countering Financing of Terrorism) standards.
Engage the Private Sector: Foster public-private partnerships between governments, financial institutions, tech companies, and e-commerce platforms to share intelligence and best practices.
Improve Risk Analysis and Surveillance: Regularly update national, sectoral, and emerging risk assessments to detect and address new terrorist financing schemes.]