To counter extremist groups’ recruiting efforts, the United States must amplify the voices and stories of defectors and women, Mr. Haroon Ullah said during an event hosted by the Pacific Council and the USC Center on Public Diplomacy. Ullah is the chief strategy officer at the Broadcasting Board of Governors and the author of the book Digital World War: Islamists, Extremists, and the Fight for Cyber Supremacy. The discussion was moderated by Dr. Karen North, director of USC Annenberg’s Digital Social Media program.

Watch the full conversation here.

"To take on terrorists’ online narratives, we have to include, curate, and amplify the voices of defectors and women," said Ullah. "How do we get those stories out there? Some of the most powerful stories are from defectors. If you look at gang culture in LA in the 90s, those who were former gang members had street cred. The messenger matters. The tragedy is that in most countries [joining a terrorist organization] is illegal, so there’s no way for them to be reintegrated. They have to be held accountable and they’re put in jail, so their stories are lost. We need to amplify and tell their stories. Their narratives can change people’s lives."

Ullah said that in addition to defector stories, voices of women—and mothers in particular—effectively counter extremists’ narratives. He added that terrorist groups like ISIL have become extremely sophisticated in terms of their online recruiting efforts.

"ISIL knows that audience matters," he said. "They have thought very carefully about and have a good sense of audience architecture and segmentation. Their mantra is, ‘The narrower the audience, the bigger the impact.’ They’ll say one thing in Arabic and then say something very different in English. Eighty percent of ISIL propaganda [in Arabic] is what we would call positive. A lot of it is about governance and giving candy to kids. Very different from what we see in English. We see the fear and horrifying beheadings and bloody narratives."

"They’re good at using new apps, social media platforms, and technologies to reach new audiences. They’re able to fail fast, change their message very nimbly, and evolve."

Haroon Ullah

Another thing from Ullah’s research—which was largely based on interviews with defectors—that he noticed is their platform agility and their ability to "fail fast and scale up," as he put it.

"ISIL started using platforms in 2014 and have since moved way beyond Facebook and Twitter," he said. "They’re using apps like Riot, which allows encrypted communications, and Sarahah, which is now the top app in 25 countries and bigger than Snapchat, in their recruitment efforts. They know how to move from platform to platform depending on the audience they’re trying to reach."

He added that they are also starting to crowdsource their recruiting using their own version of a Kickstarter campaign.

"They’re good at using new apps, social media platforms, and technologies to reach new audiences," he said. "They’re able to fail fast, change their message very nimbly, and evolve. They have these constant feedback loops."

"While we’re still talking about a platform they were using three years ago, they’ve moved on to different things. We now have to wrap our heads around ISIL 3.0."

Haroon Ullah

Ullah worries that the West is behind the curve when it comes to countering extremist narratives.

"Governments, by nature, move slowly," he said. "While we’re still talking about a platform they were using three years ago, they’ve moved on to different things. We now have to wrap our heads around ISIL 3.0. There are new terrorist groups on the horizon that have the potential to become ‘cloud caliphates’—an entirely virtual online ecosystem using the dark web, cryptocurrencies, and encrypted apps. That’s something to think about as we try to get ahead of this. This is a content war, and this field is moving so fast."

Ullah also argued that there are a few misperceptions regarding who joins groups like ISIL and why.

"It’s a misnomer in popular thinking that poverty drives militancy," he said. "That if you don’t have a job, if you need subsistence, you’re going to join one of these terrorist groups. But actually, if you look at the majority of fighters that went, they come from the middle class. They’re driven by identity grievances, not by economic grievances."

"The way ISIL recruiting works is that it’s spread through close, intimate, one-on-one contact. It actually models closely to the way diseases spread."

Haroon Ullah

Just like all politics is local, Ullah pointed out, all radicalization is local as well.

"There’s hotspot mapping and data that shows among the fighters in Tunisia, 80 percent of them came from one neighborhood in southern Tunisia, and in the Belgium attacks 75 percent of the fighters came from one neighborhood in Brussels," he said. "We almost need a public health approach. This counterinsurgency approach to fighting ISIL is not working. The way ISIL recruiting works is that it’s spread through close, intimate, one-on-one contact. It actually models closely to the way diseases spread."

Ullah pointed out that ISIL particularly knows how to reach a young audience. They plant a seed of doubt online through social media, encrypted apps, and the dark web, and eventually young people will find their message.

_______________________

Justin Chapman is the Communications Officer at the Pacific Council on International Policy.

Check out photos from this event on our Flickr page.

The views and opinions expressed here are those of the speaker and do not necessarily reflect the official policy or position of the Pacific Council.

While emerging cryptocurrencies come with enormous risks including the lack of international regulations, the technology is also a source of important innovation and has the potential to help alleviate poverty, experts told Pacific Council members in a Situation Briefing teleconference.

The panel included Mr. Kwon Y. Park, counsel at Delta Strategy Group; Ms. Andrea O'Sullivan, Technology Policy Program manager at George Mason University’s Mercatus Center; and Mr. Enzo Villani, managing director of Transform Group LLC. The discussion was moderated by Mr. John Nahas, partner at Engeocom-Invicta Trading LLC.

Blockchain technologies and cryptocurrencies such as Bitcoin are changing the way people think about economic privacy, security, government currency monopolies, and the global financial system. With digital asset trade becoming an increasingly global phenomenon, the international financial regime has yet to develop policies to address the challenges that these new technologies raise.

"It’s useful to take a step back and ask, ‘What is this thing? What is Bitcoin and other cryptocurrencies?’ It’s brand new," said Villani. "It’s not a true commodity, it’s not a complete fiat currency obviously, and it’s also not a pure equity because you don’t have the rights as an investor on the equity side, but you also don’t have the risk. It’s almost like a miles program and like crowdfunding, where people are pre-selling a utility product."

"Don’t expect to see these regulatory agencies banning specific activities outright... because U.S. regulators are mindful that they don’t want to hamper innovation."

Kwon Park

In December, U.S. Securities and Exchange Commission Chairman Jay Clayton released a statement on cryptocurrencies and ICOs (initial coin offerings, an unregulated means by which funds are raised for a new cryptocurrency venture), which in part read, "Please recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds."

Park said he doesn’t expect U.S. regulators to introduce new formal rules regarding cryptocurrencies in 2018, because they are currently waiting to see how the industry plays out.

"In 2018, I would expect more interpretive guidance being issued from various agencies to provide additional clarity to the industry, but I don’t expect formal rulemaking per se," he said. "That doesn’t mean we won’t see one or two. I also don’t expect to see these regulatory agencies banning specific activities outright, such as these ICOs as Chinese and Korean regulators have done in their jurisdictions, because U.S. regulators are mindful that they don’t want to hamper innovation and have all of these innovative projects move overseas."

He pointed out that many investors and companies are trying to get into the cryptocurrency industry in recent years because people have been successful in raising capital through the success of many ICOs. He said that a lot of the concern regarding Bitcoin and other cryptocurrencies derives from their speculative nature.

"They’re not registered exchanges," he said. "But when these cryptocurrencies or ICO projects are considered a security, it will subject the token issuer to registration requirements with the SEC. It will require the exchanges that are trading these cryptocurrencies to register with the SEC as a national securities exchange. It will be subject to ongoing investor disclosure requirements and other regulations."

He pointed out that some market professionals attempt to get around this by labeling their ICOs "utility" tokens, but that that does not prevent the token from being a security. To date, no ICOs have been registered with the SEC.

"Regarding tax issues, the IRS has deemed virtual currencies as property for tax purposes, which means it would be subject to capital gains treatment," he said. "There is now some uncertainty as to whether all coin trading will be considered a lifetime exchange, meaning will you get taxed when you trade one cryptocurrency for another, or when you trade one cryptocurrency for a fiat currency like the U.S. dollar, so when you make the withdrawal that’s when the tax treatment would be triggered."

"People in war-torn areas may not be able to use traditional banking, so in those types of situations Bitcoin and other cryptocurrencies can be a vital tool."

Andrea O'Sullivan

O’Sullivan gave a brief overview of how cryptocurrencies and online commerce developed, which she said took longer than it would have otherwise because of security concerns.

"In the early days of the internet, there was no infrastructure for people to make secure payments online," she said. "In late 2008/early 2009, it looked like the problem had finally been solved. The invention of blockchain technology—using peer-to-peer computing and cryptography—allowed people to send payments directly and securely from one person to another without having to rely on a trusted third party."

She pointed out that for people in countries with developed financial systems, this may not seem useful, but for people who live in countries without secure financial systems, this has the potential to be a very important tool in poverty alleviation.

"People in war-torn areas may not be able to use traditional banking, so in those types of situations Bitcoin and other cryptocurrencies can be a vital tool," she said. "As a potentially cheaper alternative to paying Visa or PayPal fees, this could be a way to bring more people into the financial system and expand the domain of trade across the world."

"Rather than building an unwieldy new regulatory structure that might unduly limit some of the innovation taking place in this promising industry, a better path forward is to simply apply existing policies to money transmitters in the cryptocurrency space."

Andrea O'Sullivan

O’Sullivan said when she talks to policymakers, she tells them that many of the financial policies that are in place for existing activities can simply be applied to cryptocurrencies.

"Rather than building an unwieldy new regulatory structure that might unduly limit some of the innovation taking place in this promising industry, a better path forward is to simply apply existing policies to money transmitters in the cryptocurrency space," she said. "In other cases, new policies must be developed or reassessed. The policy approach should encourage the positive uses of such technologies while keeping an eye on the potential negative uses. U.S. leadership in this area should be solidified, lest we risk pushing development and innovation to other countries. Policymakers must educate themselves about this promising industry."

Villani argued that cryptocurrencies would never have been developed in the first place if worldwide banking transactions were not so slow and costly.

"The goal of cryptocurrencies is to take out the friction in the transacting and transferring of value across the world," he said. "There are challenges with the current banking system, such as the delay in transferring and the cost of Western Union which is extremely high. So you have the unbanked trying to send money to their home countries, and they’re paying these exorbitant fees. This would never have happened if banks were trustworthy and didn’t charge big money-wiring fees to people who are close to or below the poverty level."

"If you’re not ready to lose your money completely, you shouldn’t be in it. This is high risk and high reward."

Enzo Villani

Villani said that regulators are currently letting cryptocurrencies work themselves out because they do not want to hamper innovation.

"We all know there’s some type of bubble going on with cryptocurrencies," he added. "The press and the SEC highlighting that fact is a good thing. No one wants anyone to get hurt. But the people in this market are innovators and entrepreneurs. Regarding Bitcoin or any new market, you have to look at your own analysis. If you’re not ready to lose your money completely, you shouldn’t be in it. This is high risk and high reward."

Listen to the full conversation below:

_______________________

Justin Chapman is the Communications Officer at the Pacific Council on International Policy.

The views and opinions expressed here are those of the speakers and do not necessarily reflect the official policy or position of the Pacific Council.