ISIS suggests Bitcoin as a great way to finance terrorists. In other news, water is wet

By Michael Carney , written on July 8, 2014

From The News Desk

Bitcoin has attracted some unwanted supporters, or so it would seem based on a blog post entitled “Bitcoin and the Charity of Violent Physical Struggle” on a site claiming association with The Islamic State of Iraq and Syria (ISIS).

The since-removed blog post (cached copy here, full text embedded below), which was first reported by the UK’s Sky News, details the potential use of bitcoin by terrorist organizations arguing that it would make jihadist donations “untrackable” by Western governments. The article goes on to advocate for the use of the still in development encrypted Dark Wallet to further enhance this anonymity, and references Silk Road as an example of bitcoin’s criminal commerce-supporting potential.

The post reads, in part:

This allows our brothers stuck outside of the ardh DawlatulIslam to avoid government taxes along with secretly fund the mujahideen with no legal danger upon them.

This system has the potential to revive the lost sunnah of donating to the mujahideen, it is simple, easy, and we ask Allah to hasten it’s usage for us. Given bitcoin’s history with illegal activity, such as drug and weapons trafficking, this latest association tests the theory that “all press is good press.” That said, a number of bitcoin supporters have (not surprisingly) come out to question the authenticity of the post.

Bruce Fenton, who is a Bitcoin Association board member and the founder of both Atlantic Financial and Boston Gulf Advisors Group, writes:

I live in the Middle East half the year [Editor’s note: he lives in Riyadh, KSA] and own a 25 year old security company whose clients include the DoD, FBI, Army, Navy etc. I am active in Bitcoin.

I've asked around and analyzed the piece claiming to be by ISIS which supports Bitcoin.

I'm absolutely convinced it is a hoax, phony or a fabrication.

Primary reasons are the writing style, terminology used (as if someone used a western anti-Muslim site as reference) and lots of other reasons.

It's either someone joking about or a more serious effort to discredit Bitcoin.

My guess would be a simply amateur doing a hoax not a grand government conspiracy because they fear Bitcoin. The slightly less credible Coastermonger, who is at least highly active in the r/Bitcoin sub-Redit, writes:

The original blog, was started this month in July of 2014, has only ever posted 4 articles, and within days has become the talk of the town...
To this point, Sky News writes (without explaining its source of such conclusions): “The new Wordpress blog which published the bitcoin article was originally planned as a magazine, but was superseded by an official magazine called Islamic State News. Its authors are posting the material they had already prepared.”

Coastermonger continues:

It seems to me that the writer is very interested in entertaining frightening hypotheticals. Big bold references are made to the fact that "totally anoymous (sic) donations" could be sent right from the "United States, United Kingdom" etc, countries that are actively concerned about these matters.

The writers are a little fuzzy on the details of converting between currencies, but I think the overall implication of this text is clear: a single individual could have set this up as truth or farce and the whole world can go nuts over it.

But you know what else terrorists can use for funding? Pretty much every other form of cash on the planet. Coastermonger’s point about the relative nascency of the Alkhilafaharidat blog should not be overlooked. The site is a basic wordpress blog that doesn’t even have its own domain. It appears far more likely to be the work of a single individual or two than a powerful and well-funded and demonstrably technically savvy terrorist organization. Following the removal of the bitcoin-related post, the blog has only two remaining entries, one of which was posted by user amreeki and the other Abu Muhammad. The posts have a combined 11 comments which appear to be written in a combination of Arabic, Farsi, and English.

Bankerfrombtc had by far the most amusing take on the news, writing:

You guys cried and cried that you wanted a country to accept bitcoin officially. Now one does and you just are going "no, we meant we wanted to hand pick what country?"
But moving beyond the credibility of the Alkhilafaharidat blog post, it bears mentioning that none of the original poster’s suggestions about terrorist uses for bitcoin are even slightly new ideas. That is true within the crypto-currency community as well as within law enforcement and intelligence communities. Add to this the fact that fiat currencies have been financing terrorist activities for millennia. In other words, it certainly doesn’t help bitcoin’s image to be so blatantly celebrated for its terror-enabling potential, but this blog post should do little to change the narrative – outside the fact that it makes a salacious news headline (hence, Sky News).

Adding credence to the already obvious notion that any association with ISIS is a bad association, look no further than this week’s news that the mobile payment platform by the same name, a project backed by the likes of AT&T, Verizon and T-Mobile, has chosen to rebrand. Isis CEO Michael Abbott writes in a statement:

However coincidental, we have no interest in sharing a name with a group whose name has become synonymous with violence and our hearts go out to those who are suffering.
It’s unfortunate that even amid a relatively positive news cycle for bitcoin, the crypto-currency can’t avoid association with drama and law breaking. There’s little the community can do to avoid such associations. The Internet is, after all, a place of open and free communications and pseudo-anonymous digital currencies are tools of economic secrecy. Best to chalk this one up as “par for the course,” and move on to more positive news.

Did you hear that you can buy pizza online with bitcoins?


(Below is the full text of the original Alkhilafaharidat blog post, pasted from Google Cache.)


Bitcoin wa Sadaqat al­Jihad

Bitcoin and the Charity of Violent Physical Struggle

Taqi’ul­Deen al­Munthir

“O’ you who believe! Shall I guide you to a trade that will save you from a painful torment? That you believe in Allah, and his Messenger, and that you strive hard, and make jihad in the

cause of Allah with your wealth, and with your lives! That would be better for you, if you but knew!”


After the fall of the khilafah, the bastions of al­shari’a fell. Kufr law spread across the entire earth with few areas even considering just economics or hudud . The Muslims found themselves trapped in the middle of this, with the banners of disbelief being raised above their heads. Consequently, many were outright forced to use kafir currencies. These currencies, simply through usage, assist the kufar by strengthening their economy. They often feed directly into taxes that go to funding their oppressive, murder, military forces. So, then, does not being pleased with paying taxes to the kufar, not intending to change it, believing it to be okay, and doing it willingly, constitute kufr ? Al­hamdu­llilah , much of the ummah is ignorant, so we cannot make takfir of them, nor should we, nor would we. Yet this question is very puzzling. We must actively look for solutions to avoid bolstering the kufar whilst preparations are made to move to ardh al­khilafah, which has only recently been established. Ordinary currency requires a system of trust. One must trust in the kafir government to back the currency, unlike the Islamic model which sees wealth backed by physical precious metals. The corruptness of a khalifah cannot hurt a Muslim or dhimmi’s  wealth, whereas the corruptness of a president can harm all of his people, as seen with the intense poverty in the United States and the uplifted condition of ahlul­Iraq after distribution of wealth.

This system has, therefore, eliminated sadaqah  for jihad on a large scale. One cannot send a bank transfer to a mujahid or suspected mujahid without the kafir governments ruling today immediately being aware. Perhaps, a few incredibly wealthy Muslims may find ways to avoid this system, especially ones in Arab countries, however the majority of Muslims are incapable of donating to those who need it most. Donating to impoverished children or needy mothers is a good deed, however, we as Muslims must understand that this will not stop the problem. Only the law of Allah will succeed in ultimately eliminating poverty and spreading wealth and tearing down oppression.

A proposed solution to this is something known as Bitcoin. It is a digital only currency created through a process called mining. A mining machine is a powerful computer that processes recent transactions sent through the Bitcoin network, and validates them. If it finds that the transaction is legitimate, the money, Bitcoins, are sent and some Bitcoins are given to the miner.

The people sending Bitcoins get their transactions validated and the miner receives a small fee, benefitting both sides. This system allows for no counterfeit Bitcoins to ever exist, as each one can only exist alongside validation. Bitcoin is sent instantly across the world, with waiting times not exceeding fifteen minutes on the norm.

No central servers, individuals, or groups own the entire Bitcoin system. The network is based off of miners who use their own personal computers, and anyone can mine. The network is therefore worldwide and not based in a single area either. Trying to change the software for Bitcoin requires an extremely large majority of the miners to agree, and if they dislike any change, it will not go through, as demonstrated in Rabi al­Thani of 1434 . Since Bitcoin only goes from one user to another, not through any system such as PayPal or eBay, it is completely decentralized. There is no point of weakness, no one can hack the entire Bitcoin system, and as long as people use Bitcoin, it will exist safely. New developments in Bitcoin have allowed marketplaces that run on whatever law system the individuals choose. This instantly allows for shari’ only compliant markets that cross all borders, nation state regulations, send money instantly, and are untrackable by kafir governments. Contracts used in an online marketplace could be arbitrated by third parties who judge to see if the conditions of the contracts are met. Qadis  could easily be introduced to this system and rule by shari’a between Muslims across al­khilafah. It solves the online marketplace issue for al­khilafah instantly, whilst giving Muslims an alternative to use until they offer hijrah.

The Silk Road was the popular online market running mostly on Bitcoin. It was an online black market that could have potentially be used for anything from purchasing weapons to donating to mujahideen, though most kufar used it to intoxicate themselves. It utilized user’s Bitcoin wallets, mixers to confuse those trying to spy on transactions, reputation systems, private messages, seller pages, and arbitrators, which could be readapted to be qadis. Dark Wallet is a new Bitcoin wallet designed to completely hide the activities of it’s users, providing total online anonymity. It eliminates government regulation that tries to identify bitcoins through associating them with an individuals wallets. It mixes all transactions together into an indecipherable mess, making Bitcoin untrackable. This allows our brothers stuck outside of the ardh  Dawlatul­Islam to avoid government taxes along with secretly fund the mujahideen with no legal danger upon them.

To set up a totally anonymous donation system that could send millions of dollars worth of Bitcoin instantly from the United States, United Kingdom, South Africa, Ghana, Malaysia, Sri Lanka, or wherever else right to the pockets of the mujahideen, very little would be done. Dark Wallet’s beta release will be published within the next coming months, the mujahideen of Dawlatul­Islam would simply need to set up a wallet and post their wallet address online. Then, Muslims from across the globe could simply copy the wallet address, login to their Dark Wallets, purchase whatever amount of Bitcoin they wish to send, and send them over. The mujahideen would then have someone on the other side convert Bitcoin into whatever currency they wish at optimal Bitcoin to currency transaction rates to receive the donations from the whole ummah. This system has the potential to revive the lost sunnah of donating to the mujahideen, it is simple, easy, and we ask Allah to hasten it’s usage for us.

Ameen, Ameen, thumma Ameen.