A Pakistani-American woman is facing up to 20 years in prison after she admitted to sending Bitcoin to a terrorist organization to fund their deadly criminal operation and activities.
27-Year-Old New York Woman Funds ISIS with Bitcoin
Zoobia Shahnaz, a 27-year old New York hospital technician, has admitted to a Federal Court Judge that she took out a fraudulent $22,500 loan and a number of fraudulent credit cards in order to raise a grand total of $62,000. The raised funds were used to buy Bitcoin and other cryptocurrencies, which were then sent to various ISIS shell companies across the globe.
Shahnaz admitted to the charges as part of a plea deal with prosecutors. Oftentimes a defendant can bargain with prosecutors for a less stringent sentence if charges are admitted to, or information is provided that further’s an investigation or better supports the charges of the case.
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Even with the plea deal, the judge presiding over Central Islip federal court in New York, Judge Joanna Seybert, could sentence Shahnaz to up to 20 years in a federal prison.
Shahnaz – a U.S. citizen – was apprehended by authorities from the Joint Terrorism Task Force back in July 2017, as she was preparing to board a flight to Pakistan, on her way to Syria. The investigation also revealed that the defendant was visiting “various violent jihad-related websites and message boards, and social media and messaging pages of known IS recruiters, facilitators and financiers.”
Crypto Not Typically an Effective Tool for Funding Terror
While Shahnaz eventually was caught, the American woman was able to send cryptocurrencies to ISIS abroad effectively, while the practice usually fails in general for terrorists, according to Yaya Fanusie, the director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance.
In September, during a Congressional House Financial Services Committee hearing, Fanusie revealed his findings that terrorist organizations such as ISIS have repeatedly failed to fund their criminal operation using cryptocurrencies.
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Fanusie pointed out the fact that part of the struggle is due to terrorists organizations being required to operate in desolate locations, often hidden away from society for protection.
Without easy access to internet or electricity infrastructure, sending and receiving cryptocurrencies creates an insurmountable challenge that has deterred terrorists from using the emerging technology to fund their criminal activities.
Even though terrorists organizations like Al Qaeda and ISIS have struggled thus far, Fanusie warned Congress that that could change in the future, and that the United States should prepare itself “for terrorists’ increasing usage of cryptocurrencies,” so the U.S. “can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”
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