Combating the financing of terrorism using cryptocurrencies

Abstract

The role and significance of the cryptocurrency phenomenon is defined. The directions of criminal use of cryptocurrencies are outlined. Algorithms for the use of cryptocurrencies and illegal crypto markets by Russian criminals have been revealed. The prerequisites and features of the use of cryptocurrency mixers and tumblers for the purpose of concealing criminal cryptocurrency operations are disclosed. The decentralized service “Tornado Cash” and the directions of its criminal use are characterized. Modern ways of circumventing sanctions and avoiding sanctions pressure during the purchase of cryptocurrencies by Russian war criminals and hackers have been identified. The features of the functioning of centralized and decentralized cryptocurrency exchanges in the context of existing and probable restrictions on cross-border cryptocurrency payments and p2p transfers by Russians are detailed. The basic provisions of the EU law on AML were considered in order to introduce restrictions on the implementation of anonymous cryptocurrency transactions. The positive experience of Israel in combating the financing of terrorism with the help of cryptocurrencies is highlighted. The further directions of improvement of the mechanisms to prevent the use of cryptocurrencies for the purpose of supporting war criminals and financing terrorism have been identified, including within the framework of regulatory settlement.