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This paper explores the risk that virtual currencies (VCs) may become involved in the financing of terrorism at a significant scale. VCs and asso-
ciated technologies hold great promise for low cost, high speed, verified transactions that can unite coun- terparties around the world. For this reason they could appear appealing to terrorist groups (as they are at present to cybercriminals). Currently, however, there is no more than anecdotal evidence that terrorist groups have used virtual currencies to support themselves. Terrorists in the Gaza Strip have used virtual currencies to fund operations, and Islamic State in Iraq and Syria (ISIS) members and supporters have been particularly receptive to the new technology, with recorded uses in Indonesia and the United States.

Most terrorist funding now occurs through traditional methods such as the hawala system, an often informal and cash-based money transfer mechanism, and estab- lished financial channels.1 If VCs become sufficiently liquid and easily convertible, however, and if terrorist groups in places such as sub-Saharan Africa, Yemen, and the Horn of Africa obtain the kinds of technical infra- structure needed to support VC activity, then the threat may become more significant. The task of the law enforcement, intelligence, regu- latory, and financial services communities, therefore, must be to prevent terrorist groups from using VCs at scale. The use of VCs by “lone wolf ” terrorists—a much bigger potential threat because of the small scales of funding needed to execute an attack—represents the kind of problem in intelligence and digital forensics that law enforcement agencies are well equipped to handle, even if they tax existing resources.

Attacking terrorists’ use of virtual currency at scale is a challenging task for many stakeholders. New finan- cial technology firms often lack the resources to comply effectively with oversight obligations, while regulators have tended to devote few resources to non-bank institu- tions. At the same time, different countries have adopted varying approaches to the regulation of virtual curren- cies, posing an enforcement challenge in a globalized field that requires a unified response. Finally, the privi- leging of prevention over management of illicit finance risk in the compliance world has created an incentive structure for banks that does not, ironically, push them toward innovative approaches to countering terrorist financing, including via virtual currencies.

The counterterrorist financing community should adopt three guiding principles that will provide the foundation for policies aimed at countering both the new virtual currency threat and the broader illicit finance danger. First, policy leaders should prioritize the coun- tering of terrorist financing over other kinds of financial crime. Second, the policy and regulatory posture should be oriented toward rewarding and incentivizing innova- tion. Third, policymakers should emphasize and create a practical basis for strengthening coordination between the public and private sectors on terrorist financing. These approaches form the foundation of an effective response to existing and emerging terrorist financing threats and will balance the burden of regulatory com- pliance with the policy need to support innovative new virtual currency technologies.

In this briefing, we document a recently formed apocalyptic militia ideology which, through the use of memes—coded inside jokes conveyed by image or text—advocates extreme violence against law enforcement and government officials. Termed the ‘boogaloo’, this ideology self-organizes across social media communities, boasts tens of thousands of users, exhibits a complex division of labor, evolves well-developed channels to innovate and distribute violent propaganda, deploys a complex communication network on extremist, mainstream and dark Web communities, and articulates a hybrid structure between lone-wolf and cell-like organization. Like a virus which awakens from dormancy, this meme has emerged with startling speed in merely the last 3–4 months.

The Report you are about to read, “Cyber Swarming: Memetic Warfare and Viral Insurgency,” represents a breakthrough case study in the capacity to identify cyber swarms and viral insurgencies in nearly real time as they are developing in plain sight. The result of an analysis of over 100 million social media comments, the authors demonstrate how the “boogaloo meme,” “a joke for some, acts as a violent meme that circulates instructions for a violent, viral insurgency for others.” Using it, like turning off the transponders on 9/11, enables the extremists to hide in plain sight, disappearing into the clutter of innocent messages, other data points. It should be of particular concern, the authors note, for the military, for whom “the meme’s emphasis on military language and culture poses a special risk.”

Because most of law enforcement and the military remain ignorant of “memetic warfare,” the authors demonstrate, extremists who employ it “possess a distinct advantage over government officials and law enforcement.” As with the 9/11 terrorists, “they already realize that they are at war. Public servants cannot afford to remain ignorant of this subject because as sites, followers, and activists grow in number, memes can reach a critical threshold and tipping point, beyond which they can suddenly saturate and mainstream across entire cultures.” This Report is at once an urgent call to recognize an emerging threat and a prescription for how to counter it. As such, it offers that rarest of opportunities: the chance to stop history from repeating itself.

The Internet is harnessed as an ideal means for
organization and promotion of protest ideology, which does not
require special institutional facilities for maintenance and
development. Radical right-wing extremism is reckoned to be among
the public sentiments employing this global network. Consequently,
Russia is experiencing the tightening of Internet controls. The
objective of our study is identification of the audience of Russian
radical right-wing extremist online groups registered in the largest
Russian social network Vkontakte and analysis of their properties
under conditions of the state-sanctioned censorship of extremist
content. The methodological frame of the study is the conception of
modernization, which describes both the process of transformation of
traditionalism into modernity and the forces of counteraction to this
process. The methods of linguistic markers and social network
analysis are employed as the main tools for the furtherance of our
objective.

This chapter examines the technological opportunities of the digital age and the Internet for a multidirectional exchange of Jihadi ideas, ideology, strategy and tactics. Myriads of social networks on the Internet serve as platforms for Jihadi disputes, which shows that the Internet and telecommunication technology of the twenty-first century are of central importance for new terrorism. Currently, the World Wide Web and its numerous media channels are the most important and most commonly and frequently used communication and propaganda platforms of the Islamist and Jihadi milieu. The Internet allows free cross-border and real-time communication and interaction as well as the reception of (supposedly authentic) reports on the fate of individual Jihadis and developments in far-off conflict regions. These technological achievements of the twenty-first century have enabled the (imagined) worldwide Umma to interconnect and pose a historically new potential for Jihadi actors of new terrorism to mobilise and radicalise Muslims on a global scale.

Seit Beginn des 21. Jahrhunderts besteht innerhalb der sozialwissenschaftlichen Forschung der Konsens, dass die technologischen Möglichkeiten des Internets von vitaler Bedeutung für den islamistischen Terrorismus sind (Corman 2011; Cornish& Lindley-French&Yorke 2011; Fink&Barclay 2013). Verschiedene Studien bewerten die Existenz des Internets gar als Voraussetzung dafür, dass eine terroristische Organisation wie Al Qaida bereits länger als 20 Jahre existiert, während empirisch betrachtet terroristische Gruppen durchschnittlich weniger als ein Jahr lang bestehen (Archetti 2015; Theohary&Rollins 2011). Ebenso unbestritten ist, dass der „Islamische Staat“ (IS) ohne die Existenz des Internets und der sozialen Medien nicht solch dramatisch viele europäische und westliche Anhänger für seinen Jihad in Syrien und im Irak und für terroristische Anschläge in westlichen Staaten hätte gewinnen können (Goertz 2016; Brooking 2015).