Crowdfunding for Terrorism Financing

The present FATF report von Crowdfunding for Terrorism Financing addresses the significant and evolving international market of crowdfunding, emphasizing its susceptibility to exploitation by terrorist actors. The FATF conducted its first comprehensive international study on TF linked to crowdfunding, drawing on experiences from the FATF Global Network, industry experts, academia, and civil society.
The definition of crowdfunding in this project encompasses formal crowdfunding platforms, activities on social media, messaging applications, or other dedicated websites, as well as hybrid crowdfunding methods that combine digital and physical fundraising. Multiple funding sources and financial intermediaries can be unwittingly involved in supporting TF through crowdfunding.
The report identifies four main ways in which crowdfunding platforms can be abused for TF purposes: abuse of humanitarian, charitable, or non-profit causes; use of dedicated crowdfunding platforms or websites; use of social media platforms and messaging apps; and interaction of crowdfunding with VAs.
While the majority of crowdfunding activity is legitimate, the report highlights the potential risks and challenges associated with the misuse of crowdfunding for TF. The diverse nature of the crowdfunding industry, coupled with inconsistent AML/CFT regulation globally, creates difficulties in detecting and deterring TF.
Law enforcement agencies face challenges in proving funds were used for terrorism-related offenses due to the complexity of crowdfunding operations, lack of data, and the use of anonymizing techniques. Intermediary platforms offering crowdfunding services struggle to identify TF activity on their sites, often lacking training and expertise in TF detection.
The report recommends that jurisdictions and stakeholders in the crowdfunding industry implement proportionate risk-based measures to mitigate potential abuses. Countries should be aware of the cross-border nature of fundraising activity, guard against their jurisdiction being used to finance terrorism abroad, and adapt to the evolving nature of the crowdfunding sector. Public-private information sharing, continuous outreach, and awareness raising are emphasized as essential practices for improving TF detection and understanding the industry.