Initial ADL research show a sample of 15 white supremacists, antisemites and their supporters moved thousands of dollars using cryptocurrency exchanges, many of which lack explicit anti-hate and extremism policies.
New York, NY, January 12, 2024 … A sample group of white supremacists, antisemites and their supporters used mainstream cryptocurrency exchanges to move $142,546 worth of cryptocurrency in 2023, according to a new study from the ADL (Anti-Defamation League) Center on Extremism.
Researchers tracked a sample group of 15 extremist organizations and individuals, as well as their supporters, as they used 22 different cryptocurrency service providers to traffic funds, including mainstream platforms like Coinbase and Binance. As of December 1, 2023, none of the service providers examined in this report have explicit counter-extremism policies. Though some have anti-hate policies, only one exchange in this report explicitly prohibits the funding of hate or extremism. The 15 extremist entities were chosen because they satisfy one (or more) of the following criteria: they pose a significant threat to the public, are considered influential within the current extremist landscape and/or moved significant funds through various Virtual Asset Service Providers (VASPs). ADL will be reaching out to each of the companies mentioned in the report to notify them of the findings and our recommendations.
Cryptocurrency has emerged as a safe haven for extremist fundraisers and is an attractive option due to its perceived resilience to deplatforming, its pseudonymous nature and separation from the so-called “Jewish-controlled” financial system.
“At a time when antisemitic and other hateful incidents are at an all-time high, it is more important than ever to identify and disrupt the funding underpinning hateful actors and their bigotry,” said Jonathan Greenblatt, ADL CEO. “The surge in hate demands not just awareness but uncompromising action to dismantle the financial infrastructure that fuels extremist agendas.”
The ADL Center on Extremism uses open-source intelligence (OSINT) methods to monitor hundreds of extremists and associated individuals. In 2023, COE researchers recorded thousands of cryptocurrency wallet addresses used by hundreds of entities. To ensure accurate reporting, the sample was further limited to extremists that transacted directly with VASPs.
“As extremists continue to find new platforms and methods to raise and move money, providers have a responsibility to vigilantly moderate their platforms to prevent them from being used by those who promote hate and violence,” said Oren Segal, ADL Center on Extremism VP. “Cryptocurrency exchanges must enact responsible terms of service or risk becoming a black market for extremists.”
In response to these findings, which point to widespread extremist use of cryptocurrency, ADL calls on these cryptocurrency companies to:
- Update their policies to explicitly prohibit the use of their cryptocurrency exchanges to fund extremism-related activities.
- Virtual Asset Service Providers should apply these newly formed policies in their Know Your Customer (KYC) and Know Your Transaction (KYT) practices, weighing association with extremism to disrupt outgoing transactions to extremists.
- Produce voluntary transparency reports to allow these stakeholders to better understand the scope of the problems on their platforms and the nature of their efforts to deal with them.
- Engage and build partnerships with both civil society groups and federal partners (HSI, ICE and IRS) to leverage their established programs and resources related to tracking illicit actors’ use of cryptocurrency.
- Request threat training through subject matter experts at both civil society groups as well as those located at a local FBI or Homeland Security Investigations Field Offices, Joint Terrorism Task Force (JTTF) or fusion centers.
And ADL calls on policymakers to:
- Push the SEC and CFTC to promote greater transparency by urging crypto exchanges to ban or delist privacy coins.
- Push the SEC to provide an overview of what trust and safety safeguards are put in place over crypto exchanges related to domestic violent extremism.
- Push the Treasury Department to ensure globalization standards include greater global oversight of virtual currencies.
- Push the Treasury Department to update its domestic violent extremism handbook to include explicate guidance and recommendations for cryptocurrency companies.
- Push the Treasury Department to provide background to the public on how they are tracking the use of these exchanges by hate and extremist inspired individuals and what efforts are being put in place to limit extremists from utilizing crypto exchanges for financing.
- Align with EU crypto regulations, promoting licensing for exchanges with transparency requirements to combat illegal financial activities.
- Collaborate with private sector partners for insights into cryptocurrency transactions related to domestic violent extremism.
ADL is the leading anti-hate organization in the world. Founded in 1913, its timeless mission is “to stop the defamation of the Jewish people and to secure justice and fair treatment to all.” Today, ADL continues to fight all forms of antisemitism and bias, using innovation and partnerships to drive impact. A global leader in combating antisemitism, countering extremism and battling bigotry wherever and whenever it happens, ADL works to protect democracy and ensure a just and inclusive society for all. More at www.adl.org.