Crypto Use in Terror Financing Rises, but Is Still Relatively Small: Singapore

• A Singapore terrorism threat assessment noted an increasing use of cryptocurrencies in terror financing, though cash and other means remained dominant.

• The report also said the threat level was elevated since the Israel-Palestine conflict escalated.

Singapore’s government noted an increasing use of cryptocurrencies in terror financing, even though cash and other informal value transfer systems remain the predominant means for financial transactions.

A report by the Ministry of Home Affairs assessed the threat to Singapore from terrorists and determined that while there was no indication of an imminent attack, the threat to the city-state remained “very real” and “high.”

It pointed to monthly funds sent in crypto by ISIS to individuals at the Al-Hol detention camp in Northern Syria, where ISIS-affiliated and displaced individuals are placed. The report also highlighted how pro-ISIS groups in Southeast Asia shared a poster “soliciting cryptocurrency donations.”

“As a global financial centre and transport hub with a significant migrant workforce, Singapore remains a potential source of funds for terrorists and terrorist organisations abroad,” the report said. “Our strongest defence is our collective vigilance.”

The report also said the threat level was elevated since the Israel-Palestine conflict re-escalated.

In the months after Hamas’ Oct. 7, 2023 attack on Israel, a Wall Street Journal report claimed Palestinian groups received substantial funds in crypto. The report was rebuffed by blockchain analytics firms like Chainalysis suggesting such claims are likely overstated, and blockchain security firm Elliptic, which said such claims are likely exaggerated.