Felix Pinkston
January 25, 2025 07:57
Despite a global decline in cryptocurrency donations to extremist groups, Europe is seeing an increase in such activity led by white supremacists and nationalist movements.
Cryptocurrency donations to extremist groups have shown a global decline, but Europe is witnessing a concerning increase in such activity. While overall crypto contributions to extremist groups have declined, Europe is seeing a surge in donations to movements supporting white supremacist, nationalist and anti-Semitic ideologies, according to a recent report by Serial Analysis.
Regulatory Issues and Cryptocurrency Use
Extremist groups are increasingly turning to cryptocurrencies due to debilitating efforts to exclude them from traditional financial systems. These groups exploit the anonymity and lack of regulation in cryptocurrency trading to fund their operations, which often involves spreading divisive ideologies and potentially causing violence.
Countries such as the United States and the European Union have taken steps to curb these financial flows. For example, the U.S. Treasury Department sanctioned the Nordic resistance movement, and the European Union sanctioned the base, a neo-Nazi group. These measures are part of a broader strategy to counter racially and ethnically motivated violent extremism.
Europe’s share of financing extremism is growing
Until 2017, North America accounted for most on-chain flows to extremist groups. However, since then, Europe’s share has accounted for almost 50% of total inflows between 2022 and 2024. This increase has been attributed to divisive narratives that have gained traction in Europe, such as Holocaust denial and nationalist ideology.
European groups have successfully used these stories to attract funding, especially during politically charged events such as national elections. The report highlights that key elections in Europe have acted as a catalyst for increased donations, reflecting donor enthusiasm and strategic exploitation of the political moment by these groups.
Ideological mixing and privacy measures
Extremist groups also leverage ideological overlap to strengthen their networks and amplify their resources. By combining different grievances such as homosexuality and pro-Russian themes, they broaden their appeal and attract a wider audience. This strategic mix is evident in the cross-ideological financial support observed through blockchain analysis.
Additionally, the use of privacy-focused cryptocurrencies is increasing among these groups. For example, the Daily Stormer has moved to the Darknet and uses Moro to raise money, raising awareness of the need for operational anonymity.
Challenges to the Financing of Extremism
Addressing the financial activities of extremist groups poses significant challenges due to jurisdictional inconsistencies and the legal gray areas the groups often occupy. Unlike internationally recognized terrorist organizations, many extremist groups do not meet the criteria for designation under existing money laundering and counter-terrorism financing frameworks.
Chain analysis highlights the importance of blockchain analytics in providing insight into the financial activities of extremist groups. Such an analysis can establish jurisdictions’ monitoring practices and equip both the public and private sectors with tools to mitigate the risks associated with extremist financing.
For more information, see the full report on the Chainalysis website.
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