• The Annual 'No Money for Terror Conference" was held in New Delhi, India, on the 18th and 19th of November, 2022.
• Nearly 450 delegates from across the world, including Ministers and Heads of Multilateral organizations, such as the FATF President, participated in the conference to discuss ways of enhancing global cooperation to deny finances to terrorists.
• Special importance was given to discussing the use of crypto assets in terror financing as the Union Home Minister of the Organizing Country pointed towards the transformation of Terrorism from Dynamite to Metaverse. 

The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has been raising concerns about the illicit use of virtual assets, such as terrorist financing and money laundering, for quite some time. 

The all-powerful G20, too, expanded its support to FATF when it issued globally binding standards to prevent the misuse of virtual assets and terrorist financing. 

For instance, in June 2019, it was decided in the Finance Ministers and Central Bank Governors Meeting that there is a pressing need to remain vigilant to the issues of "consumer and investor protection, anti-money laundering and countering the financing of terrorism" through crypto assets. And NMFT, or the "No Money for Terror Conference," has been a concrete step taken towards that vigilance mechanism.

This year, too, FATF President Raja Kumar urged countries to strengthen their anti-illicit finance measures and tackle this menace on a priority basis, citing the increasing use of shell companies and crypto assets for activities detrimental to the world.  

No Money for Terror

Started as an initiative of the French Government in 2018 to strengthen cooperation between countries to stop terror funding, the "No Money for Terror" conference completed its third year in 2022. 

The first such conference happened in Paris in 2018, and the second was in Melbourne, Australia, in 2019. Then, it got postponed for the next two years due to the Covid-19 pandemic. 

The third conference happened in New Delhi, India, in the third week of November 2022, and delegates from 72 countries and 15 international organizations attended the "No Money for Terror" conference in New Delhi.  

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Core Discussion Areas

Although the organizing country, India, was hoping to build "understanding and cooperation amongst nations" on the issue of international terrorism and its zero-tolerance policy against it, the discussion themes covered a lot more ground.

A total of four sessions took place during the conference, which included discussions on global trends in terrorism and terrorist funding, the use of formal and informal channels to fund terrorism, the role of emerging technologies in terrorism financing, and the need for international cooperation to address and combat these challenges.

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The Role of Crypto Assets

The conference held a special meeting of the UN Security Council's Counter-Terrorism Committee to discuss the financing of terrorist activities through cryptocurrency. 

India's National Investigation Agency expressed suspision that  the UN-sanctioned terrorist organization D-Company has been using the darknet and cryptocurrencies to deploy the proceeds of the money it has criminally laundered.

 The Union Home Minister of India, Mr. Amit Shah  pointed towards the curious transformation of terrorism from "dynamite to metaverse" and "AK 47 to virtual assets." 

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"There is an increase in the use of virtual assets like cryptocurrency, and we need to understand the patterns of these darknet activities and find their solutions,” highlighted Mr Shah.   

However, the reports published by Chainalysis do not paint  such a grim picture. As per data, in 2021, a mere 0.15% of all cryptocurrency transactions went into funding some sort of illicit activity. 

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Solutions Proposed

To stop the use of terrorism funding through crypto assets and other similar digital/virtual means, the forum has proposed to implement effective and sustained countering mechanisms that required international cooperation in ousting terrorists and their sponsors from their safe havens.

At a more functional level, crypto protocols must adopt Zero-Trust Architecture to ensure that the protection and security are all-around and holistic. 

While the simultaneous deployment of many of these ideas may prove effective in the long run, the actions taken by the international consortium to combat issues at a global level would be vital to keep consistent track of.

The first step would be to enforce FATF Travel Rule adoption globally. After all, without it, malicious actors can exploit the loopholes created by the lack of unity on Travel Rule adoption and circumvent whatever measures individual countries have implemented against the illicit use of cryptocurrencies. 

And once the Travel Rule is in force in a majority of countries, Travel Rule Solutions, such as Shyft Veriscope, will play a key role in keeping sanctioned entities and malicious actors out of the global crypto ecosystem. With this, we will finally put an end to the fears that cryptocurrencies today have become the most-probable means to launder illicit funds throughout the world. 

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