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The Islamic State may be trying to raise funds using Bitcoin

The Islamic State may be trying to raise funds using Bitcoin
There have been warnings that the Islamic State would try to use Bitcoin to raise funds.
In Internet messages posted late last month, an individual dubbed "Abu Ahmed al Raqqa" made an appeal to supporters of the Islamic State, asking them to send funds to the militant group so it could continue its plan to expand its "caliphate."

These appeals were made on the "dark Web," a collection of Web sites that use anonymity software such as Tor to hide identities, according to the Site Intelligence Group. But the message, posted in Arabic and English, did not ask for cash donations or bank transfers.
It asked for Bitcoins, the peer-to-peer cryptocurrency known for its high degree of anonymity.

For anyone following the Islamic State, such a message may cause some concern. The Islamic State has demonstrated significant skill in both fundraising (by selling ancient artifacts, for example) and technology (most notoriously, its use of online propaganda). Given what appears to be a disturbing level of support for the group all around the world, Bitcoin may seem an easy way for the group to combine these skills and become even more powerful.
There have been warnings that the Islamic State would try to use Bitcoin to raise funds: The service has been used by drug dealers and pedophiles, so why not extremist groups? In January, Ido Wulkan, an analyst from S2T, a Singapore-based cyber-intelligence company, warned that a U.S.-based cell appeared to be raising money for the Islamic State using the dark Web. Islamic State supporters have also released documents that appear to outline how Bitcoin could be used to raise funds.

However, perhaps both the technological capabilities of the Islamic State and the financial utility of Bitcoin may have been overstated. Vice's Joseph Cox points out that the jihadist dark Web fundraising site discovered by Wulkan had actually been around since late 2013 and had had little discernible effect, other than producing a copycat site apparently designed to divert its potential funders.

"Abu Ahmed al Raqqa" may face similar problems. In a message sent out in English shortly after the original appeal, he said that only the Bitcoin account he shared was the "Official Islamic State Funding Center" and that fake sites had been set up by "american and european infidels" to defraud the group.

Perhaps the "Official Islamic State Funding Center" shouldn't be too worried, however. As far as we can tell, the Bitcoin address listed by the group has never received any donations. It has a balance of zero Bitcoins ($0).