26 September 2016, 16:32 WIB
Abusing virtual world to finance terrorism

Over the past decades, advancements in modern technology have influenced the way societies assimilate information and have affected every sector of government operations.

In the macroeconomic sector, such as the global financial system, new innovations in payments and banking make it easier for customers to access and control their financial information with no boundaries. The technologies try to boost transactional competence though they sacrifice client anonymity.

Therefore, digital cash and crypto-currency issues put enormous pressure upon nation-states and legitimate governments. Online anonymous transactions have become a new emerging trend.

Against the backdrop of the Information Age, particular self-interested parties look to opportunities to exploit the information system for economic purposes. Virtual environments that maintain anonymity on the internet have transformed the criminal underworld.

The negative impacts of the advanced technology era range from simple criminal fraud to complicated cybercrime schemes. Criminals may seek to access, use or attack the financial information system unlawfully, such as terrorists attempting better ways at mobilizing funds to finance their violent actions.

The internet has become fertile ground for terrorist networks to access potential financial channels by conducting credit card phishing, hacking, cracking and also key-logging attacks as well as money laundering.

Their irreversibility affords no option [...] there is no liability protection available for users. 

Other digital currencies and global payment gateway instruments can also be misused by them.

The case of Cahya Fitriyanta, who in 2012 was convicted on a terrorism-related crime, is an example of someone financially supporting a terror group in Indonesia through conducting a meeting with several persons to raise donations for military training purposes, supporting jihadists and their widows.

Besides using fake identity cards to open bank accounts, he also worked with colleagues in hacking an online investment site  speedlineinc.com  and unlawfully mastered the database.

They attacked the entire non-active registered members data and re-activated them to conduct illegal transactions. The proceeds of crime amounted to US$36,000 and this was deposited in the account of Cahyas wife.

Afterward, the funds were sent to his partners accounts.

The case is typical of how terrorists misuse modern technology to support their networks. Nowadays, we also have other digital technology means for virtual payment purposes including e-money, Bitcoin, crypto-currencies, PayPal accounts, etc. They provide advanced innovations so that merchants can expand their business to the entire world and users are not limited by bank holidays, borders, etc. when sending and receiving money, thus they can use anonymous transactions to protect confidentiality. On the other hand, these new payment methods have several noteworthy disadvantages.

Their irreversibility affords no option for victims because there is no liability protection available for users.

Referring to the case of Cahya, if a server has been hacked, a user has accidentally deleted the virtual account or a virus has destroyed it, then the user will most likely have to absorb the loss. Furthermore, the anonymity of cyber payments means they could potentially support terrorists in raising funds.

Given the apparent increase of cyber-financing of terrorism a robust strategy in combating crime is urgent. Preventive measures to mitigate the risks and vulnerabilities are also crucial.

Preventive measures would enable better understanding of the current threat, simulate and forecast future action more accurately and enable more effective intervention to prevent crime.

Indonesia regulates antiterrorism financing and anticyber crime measures through the 2013 Law on antiterrorism financing and the 2008 Law on information and electronic transactions. In crime prevention, Bank Indonesia (BI) as the regulator for national payment systems could provide guidelines that stipulate the legal mechanism of those new payment method applications in Indonesia.

Furthermore BI should firmly decide whether the application of new payment methods in Indonesia should be legalized; thus it would be possible to arrange multi-agency collaboration with strategic institutions including the Financial Transaction Reports and Analysis Center as a financial intelligence unit and the Communication and Information Technology Ministry to work together in disconnecting the criminals lifeline in the cyber world.

Sylvia Windya Laksmi

The writer is a researcher in financing of terrorism who holds a Masters degree in terrorism studies from the University of Indonesia.

Artikel dimuat dalam The Jakarta Post edisi 15 Juli 2016

Tags : terorism