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IAQF & Thalesians Seminar Series: Coins for Bombs: Detecting Terrorist Attack Funding with Cryptocurrencies. A Webinar by Daniel Rabetti

  • 10 May 2021
  • 12:30 PM - 2:00 PM (EDT)
  • Zoom Webinar

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Abstract:

The proliferation of blockchain-based cryptocurrencies, which essentially use public accounting ledgers, has two opposing effects related to the global financial system's transparency. On the one hand, governments, market regulators, and financial institutions make significant efforts to curtail the financing of illicit activities that cryptocurrencies may be able to circumvent. On the other hand, funds and transfers that used to be known only by the involved parties are now transparent to anyone with knowledge of the economics of blockchain. This study empirically examines whether it is possible for outsiders to identify evidence of financing international terrorist attacks on public blockchain systems. We do so by utilizing empirical strategies based on finance, forensic accounting, and machine learning algorithms on millions of cryptocurrencies' transfers. We provide evidence that blockchain-based cryptocurrencies are used to finance terrorist attacks. However, the blockchain ledger underlying transparency also enables outsiders to identify the fund trails and predict terrorist attacks.

Bio:

Daniel Rabetti is a financial economist currently pursuing a P.hD in Business at the Coller School of Management, Tel Aviv University. Daniel research interest lies in the intersection of financial innovation and disclosure - as means to mitigate asymmetric information in alternative financing markets. He has been working on several academic research in the field of economics of blockchain, industrial organization, and disclosure in unregulated markets. Daniel work has been featured in prominent conferences in accounting, finance, computer science, blockchain, and economics, and his work is currently on the path for publication in distinguished peer-reviewed academic journals.