A Cyprus regulatory authority has called on accounting and audit professionals to help detect and prevent terror financing activities, emphasizing a special focus on five methods of fund transfer, including cryptocurrencies.
The Institute of Certified Public Accountants of Cyprus (ICPAC), a regulator dedicated to the accountancy profession in the island nation, issued a “terror financing alert” to combat the offense.
Aiding the law enforcement
While law enforcement agencies primarily deal with financial crimes like money laundering and terror financing, ICPAC wants to involve accounting professionals in oversight. The regulator said:
“These days, given the nature of services provided and the role of professionals as gatekeepers, it is a requirement for obliged entities to take an active role in the prevention phase.”
According to the ICPAC, terrorist organizations use five methods for transferring funds. These include donations via nongovernmental organizations (NGOs), cash, bank transfers and gift cards, cryptocurrencies and shell companies.
Directive to monitor crypto transactions
When it comes to using cryptocurrencies, ICPAC wants accountants to be vigilant about anonymous cross-border peer-to-peer transfers, crowdfunding, charities and anonymous online fund-raising campaigns.
ICPAC directed its members, associated firms and compliance officers to report suspicious transactions and reminded them that failing to do so will be considered an offense.
As a result, flagged transactions will be subject to scrutiny, which involves profiling individuals, screening crypto wallets and transactions and implementing specialized blockchain tools.
According to a United States Treasury official, Palestinian militant groups, including Hamas, used small amounts of cryptocurrencies to fund terrorist activities but widely preferred “traditional products and services.”
Palestinian Islamic Jihad $12 million after blockchain analytics firm Elliptic — which provided the data the Journal cited — rebuked the report, saying there was “no evidence to suggest that crypto fundraising has raised anything close to this amount.”
“To be clear,” Representative Tom Emmer prompted Treasury’s Undersecretary for Terrorism and Financial Intelligence Brian Nelson, ”Hamas is using crypto in relatively small amounts compared to what’s been widely reported, that’s correct?”
“That’s our assessment, yep,” Nelson answered.