White Supremacists Lean On Crypto, Says Anti-Defamation League Report on Extremists

The ADL recommends the crypto companies «update their policies to explicitly prohibit the use of their cryptocurrency exchanges to fund hate and extremism-related activities.» It also suggested regulators should limit tokens that aim to shield privacy.

«Continued vigilance in the cryptocurrency space, as well as other financial technology spaces, and responsible moderation by the underlying platforms, are needed to combat the financial elements of this rise in antisemitism, extremism and hate,» the organization concluded in its report.

Exchanges push back

For their part, crypto exchanges argue that they’re combating illegality and that cryptocurrency transactions are often conducted in plain sight – unlike in banking.

A Kraken spokesperson said the company is disappointed the ADL wrote its report «without engaging us in any dialogue» about its know-your-customer policies and money laundering protections.

«Kraken is vigilant in enforcing these policies and taking proactive steps to prevent Kraken’s services from being used as a vehicle for money laundering, terrorist financing or any other illicit activity,» the spokesperson said in a statement.

Similarly, Coinbase Chief Policy Officer Faryar Shirzad responded that the company «does not tolerate any illegal activity – of any size – on or using the Coinbase exchange,» adding that «our terms of service make this clear.»

Shirzad said that the U.S. exchange is under «clear rules around anti-money laundering and sanctions that apply to fiat and crypto.» He said the report erred in its «failure to differentiate law-abiding, regulated US exchanges from offshore companies that have served as major hubs for illegal activity,» and he added that case is still the preferred medium for criminals who «want to avoid the transparent nature of the blockchain.»

While the crypto firms defended their efforts to stave off illegality, the report didn’t make specific accusations about the money funding illicit activity.

Extremist groups also rely on the traditional financial system, from online payments to credit cards to bank accounts, where the transparency the ADL used in its review isn’t publicly available. But banning the groups from the mainstream financial network tends to raise questions of censorship.

Banks such as JPMorgan Chase & Co. have given large amounts of money to anti-hate groups including the Anti-Defamation League. But the banks’ internal programs to review customers who have ties to extremist organizations are difficult to assess from the outside.

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