Islamic State Gets Into NFTs

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According to the WSJ, the image on the far left of the above screenshot is the first documented NFT created and spread by a terrorist sympathizer. This simple card praises Islamist militants for an attack on a Taliban position in Afghanistan last month.

It suggests that the Islamic State and other terrorist organizations intend to use emerging financial technologies to avoid Western efforts to destroy their online fundraising and communications.

The Islamic State’s logo appears on the NFT, which is labeled “IS-NEWS #01” and is available on at least one NFT trading platform. According to the former officials, it was built as an experiment by a group supporter to test a new outreach and financing strategy for ISIS. Regulators and national-security officials have expressed concern about terrorists’ potential use of emerging financial technology and marketplaces like NFTs.

An NFT is a data unit that is kept on a blockchain, which is a database of structured transactions that does not require a central trusted authority. The system was initially designed to manage, value, and trade digital assets, but its creators claim that it has far broader applications, such as digital concert tickets and branded collectibles like digital playing cards.

IS-NEWS #01 does not appear to have been traded, but its presence on the blockchain—distributed across countless systems linked to the internet—makes it nearly impossible for the Justice Department and other law-enforcement agencies to remove it from the internet, as opposed to, say, a news release hosted on a traditional website.

It’s as censorship-proof as it gets. There isn’t much anyone can do to truly bring down the NFT.

Because many social-media platforms remove links to objectionable NFTs, the technology does not support the explosive replication that causes tweets or videos to go viral. Nonetheless, the more NFT blockchain facts that are revealed, the more people who see them.

By the end of 2017, ISIS had lost nearly all of the vast territory it had claimed in Iraq and Syria, effectively cutting off its main source of revenue. Western authorities have also hampered other financial routes, most notably the shutdown of its fundraising and propaganda websites. Social media platforms have also been more responsive to requests from politicians to remove postings that they believe violate their code of conduct.

Western authorities are concerned that the remnants of the group, both online and on the ground, will spark a rebirth. The withdrawal of the United States from Afghanistan last year created an opportunity for the organization to stage a comeback by seizing areas previously controlled by their adversary, the Taliban.

Two more NFTs made by the same person on the same day, Aug. 26, have Islamic State characteristics. One image shows a man in a lab coat and gas mask, surrounded by beakers and assault rifles—an Islamic State fighter, according to the caption, teaching students how to make bombs. The other advocated for smoking cessation by using a miswak, or stick toothbrush.

According to authorities, in addition to their blockchain resiliency, NFTs may provide a method of fundraising and contraband sales for terrorists, weapons traffickers, corrupt regimes, drug cartels, and others.

Transactions in NFT marketplaces may be private and anonymous, making authorities’ efforts to disrupt them more difficult.

In a February report, the Treasury Department stated, “The ability to move certain NFTs through the internet without regard for geographical distance and across borders almost instantly renders digital art vulnerable to abuse by those attempting to launder the profits of crime.”

Analysts who have investigated the IS-NEWS #01 NFT believe it is an attempt by an Islamic State supporter to see if authorities can be avoided and reputable NFT marketplaces would erase or limit the availability of the content.

It’s an attempt to figure out how to make content impervious to destruction.

The IS-NEWS #01 NFT, as well as two others from the same developer, are not currently available for purchase on the NFT marketplace Rarible or other platforms, but terrorist organizations could certainly fund their operations through the sale of NFTs.

The ad was removed and the poster’s account was terminated, according to a spokesman for OpenSea, one of the marketplaces where the NFT was registered. “There will be zero tolerance for listings that incite hatred and violence,” she said.

The NFT is accessible through IPFS, a technology that stores and retrieves data across a network of internet nodes that is extremely difficult to erase.

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