Paris attacks: EU to crack down on bitcoin transfers in attempt to strangle Isis funding

The EU is planning to introduce measures to control how virtual currencies and anonymous payments are made over the internet and via pre-paid cards in a bid to prevent terrorists such as Islamic State (Isis) from accessing financing from other countries.

In light of the Paris attacks, European interior and justice ministers gathered at a meeting in Brussels on 20 November to discuss different methods of cracking down on terrorism. One of the most important items on the agenda was the use of non-banking payment methods.

Non-banking payment methods include the use of virtual currencies such as bitcoin, as well as anonymous electronic payments made over the internet and transfers of gold and precious metals by pre-paid cards.

Over the last 24 months, bitcoin has gradually risen to become a popular method for people to transfer funds to each other quickly without the need for any third-party verification. The currency is frequently used by cyber criminals on the dark web, a section of the internet not discoverable by conventional means like a Google or directly entering a website URL.

As the websites are hidden, they are perfect for cyber criminals, who put thousands of goods and services for sale on secret underground marketplaces, which include illegal drugs, chemicals, firearms and counterfeit goods, as well as adverts for services such as hacking, gambling and sports betting.

There are also digital currencies that solely deal in gold or precious metals, whereby the digital currency issuer holds the actual metals, and clients are given digital certificates or pre-paid. Unlike the credit card industry, digital gold and precious metal currency issuers cannot reverse or dispute charges, so gold and precious metal currency transactions can clear instantly, making them highly attractive.

EU finally looking into stolen relics trade

Draft documents seen by Reuters say that the meeting will also look at how the EU can "curb more effectively the illicit trade in cultural goods". This is a key problem in the fight against IS – much of the extremists' operations are funded by ancient relics stolen from Syria and Iraq and sold to unscrupulous buyers in other countries who don't care where the goods come from.

"Unfortunately, there are no government bodies in any country funding investigations into art-trafficking looking towards comprehensive prosecution of the principle actors involved in the sale of illicit antiquities from conflict countries. While programs and funding do exist to record the impact of looting in source countries, it is not enough and is not designed to police the art market or address the problem from the buyers' end," Lynda Albertson, CEO of the Association for Research into Crimes Against Art, told IBTimes UK in an October interview about the Hobby Lobby FBI probe.

"If we're concerned about groups like IS or other militaries utilising antiquities for funding conflicts, we need to look at the buyers' market. As long as there are buyers for artefacts, there will be an illicit market fed by subsistence looters and the supply chain to feed that supply."

Being able to pay for these relics via bitcoin or a digital currency tied to gold and precious metals over the internet makes it difficult for governments and the finance industry to limit the terrorists' access to funding, and there are always people keen to purchase these rare and ancient items.

Of course, the EU would also do well to remember that IS also gains a great deal of revenue from Iraqi oil – the Iraq Energy Institute says that the terrorists produce 30,000 barrels of oil a day in Iraq and 50,000 barrels in Syria. IS is able to gain roughly $3.2m (£2.1m) a day by selling the oil on the black market at less than 50% of its price in the free market.