The risks of exploiting virtual currencies in terrorist financing operations

Zulhuda, Sonny (2020) The risks of exploiting virtual currencies in terrorist financing operations. In: IMCTC 10th Monthly Symposium, 29th October 2020, Online via MS Team. (Unpublished)

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Abstract

The use of financial resources by terrorists or for terrorists’ activities gets more sophisticated due to the more ubiquitous Internet, the big data and innovations in payment systems. Innovations including card-based, mobile-based and Internet based. Virtual currencies (VC) is one type of Internet-based payment system. It brings both hopes and threats. It promises wider reach while provides a powerful new tool for criminals, terrorist financers and other sanctions evaders to move and store illicit funds, out of the reach of law enforcement and other authorities. 2. Such threats arise due a variety of risks that are inherently contained in the system of virtual currencies, among others, Legitimacy risks; Anonymity risks; and Decentralisation risk. As VCs are not recognised as a legal tender in major jurisdictions, they are largely based on contractual agreements between the users and providers. Problems may arise if there is no mechanism to ensure the balance of contractual bargaining power. Secondly, VCs are usually designed to allow the users to conceal their identities. So without names or other customers’ identification, the relationship is non-face to face and is usually anonymous. This enables fraudulent or abusive conduct to go unchecked or untraced. Lastly, VCs are traded without central system providers. Thus, there is no central oversight body. Therefore, it makes it difficult for the law enforcement and oversight body to monitor.

Item Type:	Conference or Workshop Item (Speech/Talk)
Additional Information:	6473/84122
Uncontrolled Keywords:	Virtual currencies
Subjects:	J Political Science > JX International law K Law > K Law (General) K Law > K1001 Commercial Law K Law > KBP Islamic Law > KBP1 Islamic law.Shariah.Fiqh > KBP490 Furūʻ al-fiqh. Substantive law. Branches of law. > KBP3738 Military law
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Ahmad Ibrahim Kulliyyah of Laws > Department of Civil Law
Depositing User:	Dr Sonny Zulhuda
Date Deposited:	03 Nov 2020 11:40
Last Modified:	03 Nov 2020 11:40
URI:	http://irep.iium.edu.my/id/eprint/84122

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