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Russia, Cryptocurrency, and the Kosova and Israeli Terrorist Attacks

Updated: Dec 13, 2023

Ajsha Pllana

Updated December 12, 2023



Kosova & Israeli terrorist attacks

On September 24th, 2023 a coordinated terrorist attack took place in northern Kosova in the village of Banjskë. Serbian terrorists, comprised of nearly 30 members, hiding in the Banjskë monastery shot and killed a Kosova Police sergeant in the line of duty and injured another. The Kosova Police responded quickly killing three of the terrorists, whilst the remaining terrorists fled to Serbia. Since then, an investigation conducted by the Kosova Police in concert with international partners has uncovered a plot intended by the terrorists to instigate a violent attack with the aim to help Serbia annex parts of northern Kosova. These findings have been acknowledged and condemned by the United States and NATO Kosova Force. Kosova’s President Vjosa Osmani quickly singled out Serbian President Aleksandar Vucic for sponsoring the terrorist attack. She also named Vladimir Putin as co-conspirator for aiding Serbia and the terrorist group in order to sow discord in the Balkans.

Just two weeks later on October 7th, the Hamas and Palestinian Islamic Jihad militant groups led a coordinated terrorist attack in Israel. More than 1,400 Israeli civilians are presumed dead, with many more injured. The Israeli counter-offensive has resulted in thousands of civilian deaths in the Gaza Strip. The Israeli government has vowed to dismantle Hamas in order to prevent future attacks.

Russia’s role in the attacks

When discussing the possibility of future attacks, it is important to understand why the attacks were set in motion in the first place. The Wall Street Journal has reported that Hamas received nearly $93 million via Garantex to prepare and launch the attack against Israel. Garantex is a Moscow-based cryptocurrency exchange that was sanctioned by the United States last year. Iran is another funding partner, with nearly a $100 million provided annually to Hamas and the Palestinian Islamic Jihad.

The main benefactor from these terrorist attacks is Russia. Vladimir Putin started a war in Ukraine in 2022 that he assumed he would be able to win in a matter of weeks. The outcome of the war thus far has nearly destroyed the Russian military and caused economic chaos to Russia. Foreign investors in Russia suffered great losses due to Western sanctions and the inability to withdraw funds.

         The most challenging aspect for Russia has come from US aid to Ukraine. The US has donated billions of dollars in military aid to help Ukraine defend itself against Russia. Putin’s objective now is to create chaos in America’s primary allies. This is intended to wear down US resources whilst simultaneously creating diversions for global and public attention as it is shifted away from the war in Ukraine.

In particular, Putin is aiming to copy the plan that worked for Bashar al-Assad in Syria. Assad’s Syrian forces fought just enough to maintain the stalemate, and finally wearing down opposing forces after many years. Putin’s financial and military support is perhaps the main reason Assad remains in power in Syria. The Syrian War lasted for many years, producing one of the worst humanitarian crisis in recent history, but Assad has remained in power simply because US and international engagement waned. Putin is hoping to accomplish the same results now, by initiating violent conflicts in other parts of the world.  

In Israel, Putin-backed terrorist groups initiated a massacre in early October that has resulted into a major war.


The role of terrorist groups in major wars

There are two crucial factors that influence global events when terrorist organizations are funded and armed. The first is the protection of the origin of the chief aggressor due to the blame being shifted to the terrorist group. This strategy allows the chief aggressor to pursue its interests through a proxy war. It also provides them with the concept of plausible deniability. The second, is the ability of the terrorist attack to spiral into a bilateral or even multilateral war. This can happen if the targeted nation perceives the attacks as acts of war and responds with military force, as we have witnessed in Israel.

  •   Terrorist attacks in particular are confusing because it is difficult to trace back to the origin of the aggressor. For example, as the news and social media channels obsessed over ISIS and their gruesome behavior such as beheadings in Syria, the Assad government got away with murdering hundreds of thousands of civilians:


  • Since the terrorist attack in Israel, the Israeli-Palestinian war has spiraled, attracting global attention. The attention of the global public opinion, US and EU funding and other forms of aid have shifted from Ukraine to Israel. Putin is well aware of the impact a terrorist group can play in a war. Wagner, a terrorist group funded by Putin, was a catalyst for the invasion of Ukraine. ISIS played a major role in Syria.


Understanding these dynamics is essential to policymakers and analysts when dealing with global security issues. Efforts to counter terrorism often involve not only addressing the immediate threat but also addressing the root causes and disrupting networks that support these activities.


Advantage to Russia

Important events have taken place whilst the world’s attention has been directed toward the Israeli-Palestinian war. Putin paid a visit to China, his first visit abroad outside of the former Soviet Union since the ICC issued an arrest warrant for crimes committed in Ukraine. The discussion of whether Putin should be arrested for war crimes upon travel outside of Russia was essentially nonexistent as the global attention focused on the Israeli-Palestinian war.

Serbia’s President Vučić was also in attendance. Russia has already increased its recruitment of Serbian nationals to replenish its weakening military. Mean whilst, Kosova authorities continue to investigate and collect illegal weapons brought by Serbs near the Kosova-Serbia border. We should expect more flare ups near the border in the coming months. As a result, NATO has increased troop presence in Kosova. NATO and Anthony Blinken have both reiterated NATO's goal to remain and protect Kosova.

But at least one of Putin’s plans has worked so far. Whilst the Kosova Police were successful in thwarting the terrorist attack, the Israeli-Palestinian war has greatly escalated producing a humanitarian crisis in Palestine. Both Russia and Serbia aim to destabilize the Balkan region ahead of the 2024 American elections, with the hopes of a Trump win, which they deem as a weakened America. Ukraine's war is no longer the sole benefactor of the world's attention.


Cryptocurrency

Disrupting the funding of terrorist organizations is a key strategy in countering terrorism. By cutting off their financial resources, it becomes more difficult for these groups to operate, plan and execute attacks. Cryptocurrency has become a main source of funding for many terrorist organizations.

Kosova has worked in the past to seize illegal crypto-mining equipment, where the terrorist attack was plotted. Non-state actors in Serbia must also be monitored by the US and EU, in order to counter terrorism against Kosova. One of the most important factors in the Israeli terrorist attacks is the use of cryptocurrency to funnel money to terrorists. Cryptocurrency users, through the use of mixers, are able to obscure their identity, making it difficult to trace funds. International collaboration has allowed for the identification and tracking of funds flowing to terrorist organizations. The use of cryptocurrency in the attack against Israel has inspired discussion in Congress and amongst US policymakers.

Perhaps the most important step to preventing cryptocurrency-funded terrorist attacks is the recent federal charges brought forth by the US Department of Justice. In late November, Binance and its CEO plead guilty in anti-money laundering, unlicensed money transmitting, and sanctions violations. Binance agreed to pay over $4 billion dollars, the largest corporate penalty in US history. The investigation targeted Binance’s illegal transactions in sanctioned jurisdictions such as Iran, Syria, and regions of Ukraine occupied by Russia. The US Department of Justice said this hefty fine was issued to serve as a warning to other virtual currency operators. Until now, cryptocurrency has largely gone unregulated. However, as terrorist attacks spill into large scale wars that directly impact governments and civilians, governments have begun to monitor cryptocurrency more closely. This is a trend that will continue to rise.


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