Overview

In 2021, the leader of Australian neo-Nazi group (not a proscribed terrorist organisation) used social media, digital currency and a crowdfunding platform to elicit funds to support their legal defense in relation to assault and affray charges. An encrypted messaging app was used to make an appeal for Monero (XMR) donations and supporters were instructed to create a personal VA wallet and use a credit card or stored value card to purchase XMR from a Seychelles-registered digital currency exchange. Funds were also raised in both cash and micro-donations via the crowdfunding platform.

Source: Case study extracted from the FATF publication "CROWDFUNDING FOR TERRORISM FINANCING"

Compliance Insight

High-Risk Organisation: While the organization is not officially designated as a terrorist entity, its nature warrants a high-risk classification. Crowdfunding platforms must conduct enhanced due diligence to assess the associated risks and determine whether these risks can be mitigated and if the organization/campaign falls within or outside their risk appetite.

Legal Defence Cases: Legal defense campaigns often present unique compliance challenges. To effectively address these complexities, crowdfunding platforms should conduct thorough risk assessments and establish internal control criteria. Categorizing campaigns into low, medium, and high-risk levels based on factors such as the type of legal defense case, the parties involved, and the status of the charges. This factor help to serve as a proactive measure to ensure robust compliance and helps to mitigate potential risks.