Philippines National Security Adviser warns of threat Crypto presents to CFT

Hermogenes C. Esperon, Jr., National Security Adviser for the Philippines, has spoken on the potential of cryptocurrencies and digital channels to open up new avenues for the financing of terrorism, opening up new risks for the Philippines government to manage.

At a summit hosted by the Anti-Money Laundering Council (AMLC), Esperon stated that “The emergence or proliferation of virtual and cryptocurrencies adds to our dilemma…We seek the expertise and good practices of our counterparts to improve on our system, as this is a relatively new domain in our jurisdiction.”

“Our law enforcement continues its efforts to disrupt these financial networks even before funds are moved or transferred…Cutting off their lifeline is a crucial step to undermine their capabilities and frustrate their ability to carry out terrorist attacks,” Esperon continued.

Terrorist entities using the threat of or carrying out of kidnapping to extract ransom fees or to raise funds through extortion allows organisation to fund themselves or facilitate terrorist attacks. He also described how funding from family members, friends, and non-profit organisations further contributes to the funding of terrorist activities.

Esperon described the importance of CFT, drawing attention to the Siege of Marawi, in which ISIS militants combatted Philippine government security forces for 5 months, stating that “Terrorism financing was integral (for) foreign terrorists in staging such acts and sustain it for a long time,” according to a report by BusinessWorld.

He noted that terrorist had also been receiving funding from social networking sites, who made financial contributions through digital payment channels, naming cryptocurrencies as one source.

The director of the Anti-Money Laundering Council, Mel Georgie B. Racela, said in a speech at the summit that “the AMLC has referred 620 intelligence briefs and has conducted nine risk assessment and strategic studies, since 2017.” He noted that the council has frozen assets of over PHP1 billion between January 2018 and July 2019, including PHP52 million in suspected funding for terrorism.