NICOSIA – Warning cryptocurrency could be used to finance terrorist activities, the Institute of Certified Public Accountants of Cyprus (ICPAC) sent an alert to its members to step up monitoring and Know Your Customer (KYC) measures to deal with it.

The organization said accountants are on the front line of detecting and preventing terrorist financing activities and should be aware of five transfers methods  including cryptocurrencies and should be especially vigilant, said Crypto News.

https://cryptonews.com/news/cyprus-issues-alert-to-accounting-professionals-to-combat-crypto-terror-financing.htm

ICPACsaid that terrorists can use crypto through legitimate and unlawful funds and that the first tool to deal with the risk is to thoroughly check all transactions, no matter how small, and be aware of the danger signs.

ICPAC identified several methods terrorists use to transfer funds, including financial institutions, electronic money institutions (EMIs), payment institutions, crowdfunding platforms, and cryptocurrencies, the site said.

It added that the alert stresses that terrorists often exploit the anonymity of cryptocurrencies for cross-border peer-to-peer transfers and receive funds through crowdfunding or charitable donations, making them hard to track.

ICPAC advised financial professionals to use specialized blockchain investigation tools to monitor suspicious wallets and transactions and especially the criticality of strict KYC procedures to prevent terrorist financing activities.

Charitable organizations and non-profit organizations (NPOs) are particularly susceptible to exploitation by terrorists, and ICPAC urged them to scrutinize donations, especially those linked to conflict zones or jurisdictions under sanctions, the report said.

Members, associated firms, and compliance officers are reminded to report suspicious transactions and warning failure to report them is an offense and that flagged transactions will be checked through profiling, crypto wallet screening, and special blockchain tools.

ICPAC also noted that terrorists often transfer funds using bank accounts registered under the guise of charities or unrelated parties. Accounts in non-EU banking institutions further complicate the tracking of these funds, the site said.