Following the Crowd: Clarifying Terrorism Financing Risk in European Crowdfunding

Despite statements of official concern, the extent to which crowdfunding’s potential for terrorism financing (TF) abuse has translated in practice remains unclear. In this briefing paper Stephen Reimer and Matthew Redhead look again at the TF risks from crowdfunding, from its inherent vulnerabilities to the current evidence around the scale and character of actual abuse. Although some well-established platforms have been abused by violent extremists, and radical groups on their fringes, formal crowdfunding’s overall current significance as a TF stream remains relatively small within the European context. It is also apparent that risks are higher outside formal crowdfunding platforms, with the internet offering possibilities for less-regulated ‘pop-up’ methods using social media and, increasingly, cryptocurrencies. Such challenges must therefore be addressed, but this will need to be done in a focused and proportionate way to ensure that broader financial innovation is not stifled unnecessarily.