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US woman charged with using Bitcoin to finance Daesh

Woman Bitcoin Daesh IS finance

NEW YORK: US prosecutors have charged a New York woman with using Bitcoin and other crypto-currencies to send funds to the Islamic State group, also known as Daesh.

Zoobia Shahnaz, 27, was arrested at her Long Island home on Thursday for sending over $150,000 through shell accounts in China, Pakistan and Turkey to benefit IS extremists, according to AFP.

Other reports quote the Justice Department as saying that much of the money came from bank loans and credit cards. With that, she bought $62,000 worth of Bitcoin and other cryptocurrencies, which can offer owners anonymity in transfers and payments.

After making the transfers, Shahnaz tried to travel to Syria, prosecutors alleged.

She booked a flight to Pakistan that included a layover in Istanbul, which they called “a common point of entry for individuals travelling from Western countries to join ISIS (Daesh) in Syria.”

Shahnaz was charged with five counts of bank fraud and money laundering, but not for supporting a designated terrorist organization, the usual charge for people helping or planning to help the Islamic State.

What is Bitcoin?

Bitcoin is a virtual currency created from computer code. Unlike a real-world unit such as the US dollar or euro, it has no central bank and is not backed by any government.

Instead, Bitcoin’s community of users control and regulate it. Advocates say this makes it an efficient alternative to traditional currencies because it is not subject to the whims of a state that may devalue its money to boost exports, for example.

Just like other currencies, Bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them.

Where does it come from?

Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto.

Last year secretive Australian entrepreneur Craig Wright said he was the creator of Bitcoin, but some have raised doubts over his claim.

Hundreds of other digital currencies followed but Bitcoin is by far the most popular, with an increasing number of merchants accepting digital currencies for payments.

Transactions happen when heavily encrypted codes are passed across a computer network. The network as a whole monitors and verifies the transaction in a process that is intended to ensure no single Bitcoin can be spent in more than one place simultaneously.

Users can “mine” Bitcoins — bring new ones into being — by having their computers run complicated and increasingly difficult processes.

However, the model is limited and only 21 million units will ever be created.

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US woman charged with using Bitcoin to finance Daesh

by Agencies