Coins for Bombs: The Predictive Ability of On‐Chain Transfers for Terrorist Attacks

Abstract

This study examines whether we can learn from the behavior of blockchain‐based transfers to predict the financing of terrorist attacks. We exploit blockchain transaction transparency to map millions of transfers for hundreds of large on‐chain service providers. The mapped data set permits us to empirically conduct several analyses. First, we analyze abnormal transfer volume in the vicinity of large‐scale highly visible terrorist attacks. We document evidence consistent with heightened activity in coin wallets belonging to unregulated exchanges and mixer services—central to laundering funds between terrorist groups and operatives on the ground. Next, we use forensic accounting techniques to follow the trails of funds associated with the Sri Lanka Easter bombing. Insights from this event corroborate our findings and aid in our construction of a blockchain‐based predictive model. Finally, using machine‐learning algorithms, we demonstrate that fund trails have predictive power in out‐of‐sample analysis. Our study is informative to researchers, regulators, and market players in providing methods for detecting the flow of terrorist funds on blockchain‐based systems using accounting knowledge and techniques.

Cybercrime on the Ethereum Blockchain

“…Other studies have investigated specific forms of cybercrimes and malware. For example, Amiram et al (2022) report that greater-than-usual blockchain activity can be linked to the vicinity of terrorist attacks, suggesting that terrorists financed the Sri Lankan Easter Bombing through cryptocurrency. Cong et al (2022) examine, inter alia, dark web conversations in Russian to shed light on the organization of crypto-cybercriminals.…”

Analisis Bibliometrik Akuntansi Forensik: Wawasan, Tren, dan Arah Penelitian Masa Depan

“…Sementara itu, bitcoin adalah mata uang digital yang menggunakan teknologi blockchain untuk memfasilitasi transaksi peer-to-peer (Leverett et al, 2020). Blockchain menyimpan jejak transaksi yang dapat diakses secara publik dan memberikan informasi yang bermanfaat dalam investigasi forensik terkait transaksi keuangan dan aktivitas ilegal (Amiram et al, 2022). Penelitian dalam bidang akuntansi forensik sering berfokus pada analisis blockchain untuk mendeteksi transaksi yang mencurigakan, seperti pencucian uang atau penipuan aset (Inácio & Santos, 2023).…”

Tax-Loss Harvesting with Cryptocurrencies

“…Empirically, Bourveau, De George, Ellahie, and Macciocchi (2021) and Lyandres, Palazzo, and Rabetti (2021) examine the roles of analysts and disclosure in unregulated initial coin offering (ICO) markets and post-ICO operating performance. Amiram, Jørgensen, and Rabetti (2022) exploits a blockchain-enabled transparent accounting system to detect terrorist-associated transfers. Tang and Zhang (2022) examines country-level regulation effects on crypto adoption.…”