Coinbase’s “Special Investigations Team,” which recently produced a blog about terrorist financing, found Ripple (XRP) is one of the most-loved cryptocurrencies for Saudi jihadists, just behind Bitcoin.
So, it turns out that XRP — the cryptocurrency created by Ripple Labs in 2012 — isn’t just destined for use by financial institutions anymore.
Coinbase calculated Saudi jihadists have leveraged BTC and XRP to acquire nearly half a million dollars.
Alternatively, every other terrorist organization described by Coinbase, including Hamas and ISIS, almost exclusively utilized Bitcoin.
Saudi Arabia and XRP Army linked by marketing company
This isn’t the XRP Army’s first run-in with Saudi jihadists and extremists.
Last January, journalist Geoff Golberg released research mapping a Saudi Arabian state-sponsored disinformation Twitter operation (begun in earnest after the murder of Jamal Khashoggi) to numerous large and oft-retweeted XRP Twitter users.
Needless to say, Golberg implied that the XRP Army and Saudi government could be using the same third-party marketer for their propaganda campaigns.
If Coinbase’s claims are true, the crypto exchange listed XRP despite seeing the cryptocurrency’s use by Saudi jihadists — specifically in late 2020.
Coinbase’s internal investigation no doubt seeks to prove that a minimal amount of crypto transactions are tied to terrorism (it says just 0.05% of illicit activity is terrorism-related).
But it could be that this contributed to Coinbase’s decision to delist the cryptocurrency in January of 2021, alongside the US Securities and Exchange Commission’s lawsuit.
US Treasury concerned about crypto-fueled terrorists
Indeed, Ripple Labs is locked in a lengthy and contentious court battle with the SEC over XRP, which the regulator considers an unregistered security.
While that case has sweeping implications for the crypto industry at large, the US Treasury has been concerned about the use of digital currencies for terrorist financing since at least 2020.
“Beginning in August 2020 through August 2021, terror organizations began receiving ETH, ERC20 tokens, and XRP donations,” reported Coinbase.
“This fundraising can solely be attributed to a Saudi-led jihadi activist movement, which began soliciting donations in the form of BTC, ETH, XRP, and various ERC20 tokens in 2020.”
The Treasury previously stated that “the growing misuse of digital assets and failure of foreign jurisdictions to effectively supervise digital asset activity” is one of the “most significant vulnerabilities in the US,” (our emphasis).
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