THE LIBERTARIAN ENTERPRISE
Number 849, November 29, 2015
To eliminate a society's weapons, it is
necessary first to eliminate knowledge
of weapons, and to eliminate knowledge
of weapons, it is ultimately necessary
to eliminate all knowledge of any kind.
Paris Terror Not Funded by Bitcoin
Attribute to L. Neil Smith's The Libertarian Enterprise
Earlier this week, Bruno Delpeuc'h (his last name is said "Dell-peck") joined the Digital Cash Alliance advisory board. You can read more about him on the Alliance web site, or at his IndieGoGo profile.
Almost immediately, French high technology journalist Matthieu Delacharlery of Metronews contacted Bruno about the topic of ISIS/Daesh using Bitcoin to finance terrorism.To his credit, Matthieu's questions are open-minded on the topic. Here are those questions as received by Bruno:
1. What types of virtual transactions does ISIS/Daesh use?
2. Are they really untraceable?
3. Are they used to launder oil money? To buy weapons? Drugs?
4. Using bitcoin by ISIS/Daesh is it real or imagined?
5. Piracy risk and financial losses, not very practical, eventually, so why?
6. Why then would they want to build their own currency in parallel (except for the symbolism, right)?
7. According to the German newspaper Der Spiegel, syndicated by Reuters, Europe may have to review all the rules on fund transfers, particularly those enabled by new companies in the sector. Does Europe really have the means to do so?
8. How would this work, by controlling companies who exchange bitcoins against euros or dollars?
Bruno's interview with Matthieu was published yesterday and can be found here (in French, or try Google's translation). But naturally we had quite a few thoughts among ourselves on this topic, and of course not all of them made it into the published interview.
First off, transactions on the Bitcoin blockchain are not untraceable, they are permanently published facts recorded by everyone running the Bitcoin Core software. You can look up transactions at various web sites including Blockchain.info. So if there is evidence of ISIS/Daesh using a particular Bitcoin address, one can get quite a lot of information about what happened - where the Bitcoin came from, how much of it there was, and any other information included with the transaction.
Then we come to the question of how the Bitcoin gets used. Recently in Paris there were a series of attacks by terrorists. Some of the weapons they use seem to have been tracked to Belgium. So, who are the Belgium arms dealers who accept Bitcoin, if any exist? It is pretty clear that if a person in Europe wants to buy guns and doesn't want a lot of questions asked, they get euros in 100 euro and 500 euro notes, say, and find a seller who accepts cash.
Where would ISIS/Daesh be getting their Bitcoins? They must find a buyer for oil somewhere, right? Who is this mysterious buyer of oil paying in Bitcoin? The blockchain ought to show some evidence for it.
It would be far simpler for ISIS/Daesh to sell oil for euros. And, indeed, we find lots of evidence to support that conclusion:
From this last link, here is a brief excerpt: "Turkish Socialist party member Gursel Tekin has established that Daesh’s smuggled oil is exported to Turkey by BMZ, a shipping company controlled by none other than Bilal Erdogan, son of 'Sultan' Erdogan. At a minimum, this violates UN Security Council resolution 2170. Under the light of Putin’s message of going after anyone or any entity engaged in facilitating [ISIS/]Daesh’s operations, Erdogan’s clan better come up with some really good excuses."
Is ISIS/Daesh selling oil for Bitcoin? This idea seems very doubtful. They are most likely selling oil in Turkey for EU euros. Which, when you think about it, neatly solves the problem of how to pay for guns in Belgium. Because we know that Belgian gun dealers, especially on the black market, are happy to accept EU euros.
One does not have to invent oil traders buying ISIS oil for Bitcoin and Belgian gun merchants selling guns for Bitcoin. Doing so is illogical, violating good old William of Ockham's "razor," that says we should not multiply entities unnecessarily.
If there is no such evidence of large scale oil for Bitcoin and Bitcoin for gun purchases, and we see none on the Bitcoin blockchain, then blaming Bitcoin is a scape goat tactic. Similarly, the various people, like the CIA's John Brennan, claiming that ISIS/Daesh was using encryption to plan the attacks in Paris have proven to be utterly false. Perhaps it embarrasses France that NATO member nation and supposed ally Turkey is buying ISIS/Daesh oil and providing a major pathway for terrorists to enter Europe. If one wishes to look at the truth about ISIS/Daesh, one can also find quite a bit of US military and diplomatic support for their efforts, and a huge amount of Saudi Arabia and Qatar support for them. Very likely, the recent attacks in Europe are not Bitcoin's fault.
Now, there are some social media postings that show Arabic messages encouraging people to use Bitcoin to fund ISIS/Daesh and jihad. These postings give out Bitcoin addresses. Are these posts from actual ISIS/Daesh terrorists, or are they from espionage agencies wanting to create reasons to attack Bitcoin? We don't know.
We do know, however, that the "evidence" that one wallet possibly linked at some point on the blockchain to addresses where ISIS/Daesh are collecting bitcoin donations is one that holds $3 million in Bitcoin is a lot of nonsense. Here is some analysis on that topic.
With respect to gun and drug purchases: People can buy weapons for EU euros, right? There are gun sales in Belgium, in Austria, legally, complying with national laws in those places. These seem to take place primarily for euros, though, not Bitcoin.
There are also places, right in Paris, where one can buy marijuana, cocaine, heroin. People sell those things for EU euros in cash.
If there are bitcoin addresses where people have bought guns for Bitcoin in Europe, there should be records of those transactions on the blockchain. We think it is simpler and more logical to see oil being sold for euros and euros being used to buy guns.
"Security theatre" is very different from actual security. The CIA built al Qaeda in Afghanistan starting in the late 1970s to fight against the Soviet Union. Don't take our word for it, check out the words of Jimmy Carter's national security adviser, Zbigniew Brzezinski.
Perhaps in a truly just world, Brzezinski would crawl on his hands and knees over broken glass to the homes of each of the families of the victims of the 11 September 2001 and all subsequent terror attacks and beg their forgiveness for his arrogance.
One remembers also that in 1990 and 1991, the USA and "coalition forces" joined together to contest the Iraq invasion of Kuwait, which project brought hundreds of thousands of Americans to Saudi Arabia. Desert Storm made a great many people in Saudi Arabia very unhappy.
Many Americans are Christians, some are of other religions, very few are Muslim. So, mostly, Americans are "infidels" by the standards of Wahhabi Islam. Osama bin Laden's objection, his "fatwa" in 1994, as written, his "holy war of jihad" was based on the USA having infidels stationed within a few hundred kilometres or less from the holy cities of Mecca and Medina.
Is there a huge difference between the authoritarian, torturing, murdering-for-religious-infractions government of Saudi Arabia and the authoritarian, torturing, murdering-for-religious-infractions government of ISIS/Daesh? The two governments/organisations (Kingdom of Saudi Arabia, ISIS/Daesh) share a common religion - Sunni-Wahhabi Islam. They have many similar habits toward women, civil liberties, journalists, torturing prisoners, etc.
Also, if one looks at a map, one can see that the territories claimed by ISIS/Daesh run from the Syrian border with Turkey through Western Iraq and to the Iraq border with Saudi Arabia. So, one could suppose that some ISIS/Daesh oil is sold to the Saudi government, or to private parties representing militant extremists in Saudi Arabia (the bin Laden family is from Saudi, as are quite a few of the ISIS/Daesh fighters whose nationalities are identified here.
Now, Syria borders Turkey, Jordan, Iraq, Israel, and Lebanon. Again, we would not be surprised to learn of an oil for cash transaction taking place in Jordan. The connection to Lebanon might not be permanent, given how territory moves back and forth among the various players, including Assad's government. For that matter, we have know way of knowing if the Israeli Mossad accepts oil from ISIS/Daesh and pays in euros. This seems unlikely, but, so does the oil for bitcoin and bitcoin for guns approach.
Since ISIS/Daesh have been using USA weapons, including an anti-tank system, as indicated here.
Perhaps, then, we should surmise that the United States Central Intelligence Agency arranges for the sale of ISIS/Daesh oil for dollars. Where, how and to whom? Look at the list (from European sources) in the .jpg indicating the nationalities by country where ISIS/Daesh fighters come from. Lots of countries on that list are able to convert Saudi Riyals and EU euros to US dollars. So we don't need to assume that ISIS/Daesh oil is sold for dollars, right? Nor do we need to assume it is ever sold for Bitcoin.
With respect to the question on having their own ISIS/Daesh currency: Everyone wants to have their own currency. "Everybody needs money. That's why they call it money."—Danny DeVito, from the film "Heist."
Another important point reflects on whether the ISIS/Daesh people are indeed true Islamists. If they are, as they claim, how could it be true that they are using Bitcoin. Truly committed extreme Islamists who chop off heads and hands and make women wear burkhas would surely use only the money specified in the Koran: the gold dinar and the silver dirham, in the specified weights and purity. Bitcoin, or any electronic digital money, couldn't possibly qualify. To use it would thus be blasphemy.
What about Europe having the power to track all financial transactions, everywhere? Currently, no, Europe has no such capacity. Yes, they wish to develop that capacity as seen here.
Would they be able to control the companies that exchange Bitcoins for national currencies? Possibly. But there is very little control over who can go into a cafe and offer bitcoins for euros. Nor is there any reason to believe that anyone in ISIS/Daesh needs to do so. After all, they can already sell oil for euros.
ISIS/Daesh is a creation of the USA foreign policy opposing Bashar al-Assad's government of Syria. Blame Hillary Clinton for promoting this policy while at the State Department. Blame the CIA for recruiting, training, and funding factions including al Qaeda. Blame Zbigniew Brzezinski for encouraging Islamic fundamentalists to help him end the Soviet empire. Blame Turkish, Saudi, or Jordanian buyers of oil, possibly representing Swiss or Dutch groups, or not. Blame Bitcoin? It just doesn't make sense.
So, what does one conclude from this set of questions, these legitimate concerns, raised by a more or less mainstream journalist in the technology sector? It seems pretty clear that there are people in national governments and international alliances, like the government of France, like European Union, like NATO, and like the USA government which believe that Bitcoin, crypto-currencies, and privacy technologies like encryption are dangerous.
Dangerous to whom? Why, dangerous to the big banks, the big companies, the people most likely to suffer losses from the disruption of new technology. Certainly dangerous to the ambitions of espionage agencies which Manning, Snowden, and many others have demonstrated want to spy on everyone, no matter what you are doing. Spy on you for no reason, to collect everything you ever write, say, or think, and manipulate those data streams to their own ends. Probably, the espionage agencies want to be able to plant information on anyone's computer or smart phone in order to have an excuse to arrest, torture, and kill that person, based on their long history of indecency, mass murder, and support of authoritarian regimes.
But is there any evidence that encryption technology or crypto-currency technology is being used by ISIS/Daesh and other terrorists. No. There is not. On the evidence, national governments and espionage agencies use encryption technologies. Terrorists, it turns out, do not.
Given these facts, if you want to use encryption to safeguard your privacy on the Internet, you might consider supporting the IndieGoGo campaign to improve the ElanVPN.net network. Buy a perk, you'll be glad you did.
Bruno Delpeuc'h grew up with cyberculture and learned from hackers and cypherpunks pioneers. Intrepid seeker and internet entrepreneur, he likes to explore unknown areas and open up new digital zones. For over ten years he participated in various projects of privacy enhancing technologies (Xerobank, Rayservers). He is co-founder of ElanVPN, the actual CEO of Rayservers and a special advisor for Digital Cash Alliance and Voucher-Safe.
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