Terrorists are using crypto currencies as a way to fund their operations, Australia’s home affairs minister Peter Dutton has warned.

The anonymity offered by digital and online currencies has enabled them to operate without being tracked or observed.

The minister said the increasing use of online currencies, online payment systems and crowd-funding platforms were new sources of income and funding which criminals were exploiting. He was addressing a counter-terrorist conference in Melbourne.

He called on countries to be alert to the new methods of financing criminal activities. He also warned that charities and not-for-profit organisations might become unknowing vehicles for the laundering of terrorist finances.

"The increasing use of digital and crypto-currencies, stored-value cards, online payment systems and crowd-funding platforms provide new channels through which terrorism may be financed," he told the Melbourne conference.

A study on crypto currencies and blockchain by the European Parliament Union in 2018 also warned of the threat.

The Intergovernmental anti-money-laundering organization Financial Action Task Force (FATF) has urged countries to tighten rules on cryptocurrencies, as we reported in August.

“More and more regulators are worrying about criminals who are increasingly using cryptocurrencies for illegitimate activities like money laundering, terrorist financing and tax evasion,” it said. “The problem is significant: even though the full scale of misuse of virtual currencies is unknown, its market value has been reported to exceed €7bn worldwide.”

In July Currency.com reported on how the U.S. Commodities Watchdog was investigating the Crypto Exchange BitMEX.

Further reading:

Hong Kong regulator to create new crypto exchange regulations

EU rethinks its approach to regulating stablecoins