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Cyprus Targets Nonprofits, Cryptocurrency Organizations in Terrorism Financing Warning — TradingView News
Cyprus has issued a warning to financial professionals, highlighting their vital role in countering terrorist financing. This directive from the Institute of Certified Public Accountants of Cyprus (ICPAC) highlights a tighter control over cryptocurrency transactions and non-profit organizations (NPOs), which are increasingly susceptible to exploitation by terrorist entities.
Preventing the financing of terrorism
ICPAC’s “Terrorist Financing Alert” calls on Cyprus’ accounting and auditing sectors. Recognizing the evolving financial crime landscape, the alert draws attention to five key methods of transferring funds, with cryptocurrencies at the forefront.
According to the institute, these digital assets, known for their pseudo-anonymous nature, pose a growing challenge in tracking illicit financial flows. The directive emphasized the importance of monitoring transactions and performing Know Your Client (KYC) procedures as essential defenses against terrorist financing activities.
Based on the alert, ICPAC highlighted specific risk areas where financial professionals need to be more vigilant. Charities and NPOs, often targets of illicit funding, are urged to scrutinize donations. Operations’ proximity to conflict zones or sanctioned jurisdictions amplifies these risks, requiring due diligence on ownership structures and funding sources.
Tracking financial activity associated with terrorist financing is reportedly complex, ranging from small transactions to substantial sums. Historically intelligence- and intelligence-based, these efforts now place greater responsibility on financial professionals as frontline gatekeepers.
Cryptocurrency and Emerging Risks
Of particular concern are cryptocurrencies, which are increasingly favored by terrorists for their anonymity and global accessibility. The alert emphasized the importance of screening crypto wallets against sanctions lists and monitoring transactions for suspicious patterns, including the use of mixing services.
As cryptocurrencies evolve, ICPAC said that the regulatory frameworks and technological tools used to combat their misuse in terrorist financing must also evolve. In particular, failure to report suspected terrorist financing constitutes a serious crime under the Cyprus Act on Combating Terrorism and Protection of Victims, 2019.
The directive serves as both a regulatory guideline and a stark reminder of the legal repercussions for non-compliance in the financial sector. ICPAC plans to further strengthen its guidance on terrorist financing, ensuring that members and firms remain adept at navigating these complex regulatory landscapes.