~Jess

Review: Edward Fishman, Chokepoints: How the Global Economy Became a Weapon of War (Elliott & Thompson Limited, 2025).

BLUF: Chokepoints argues that in the 21st century, the US has leveraged control over key economic domains, such as the US dollar, global financial networks, and advanced technology supply chains, into powerful tools of geopolitical influence. The book examines how US administrations have employed tools such as sanctions and export controls to coerce rivals like Russia, China, and Iran, and through these coercive measures, have reshaped global power dynamics without resorting to traditional military force. The book also includes a stark warning: that economic interdependence will continue to unravel, making these tools less impactful.

Author Info: Edward Fishman is an international relations scholar and a former U.S. diplomat. He’s currently a Senior Research Scholar at Columbia University’s Center on Global Energy Policy and teaches as an Adjunct Professor at the School of International and Public Affairs. He holds fellowships at both the Center for a New American Security and the Atlantic Council.

Brief Summary

In Chokepoints, Fishman shows how today’s scramble for economic security is redrawing the global map and pushing us toward the end of globalization as we’ve known it. The roots of this shift can be traced back to the Bretton Woods system established after World War II, when fixed exchange rates and the US dollar’s convertibility into gold solidified the dollar as the world’s reserve currency. Even after Nixon suspended the dollar’s link to gold, the financial interdependence born at Bretton Woods endured, giving Washington unprecedented leverage over the global economy. This legacy of dollar dominance created the very chokepoints that now empower US economic warfare, but also expose the vulnerabilities that could unravel globalization in the decades ahead.

The US has weaponized its dominance over the dollar and global financial networks, turning sanctions, export controls, and other economic tools into instruments of statecraft by controlling access to the US dollar, markets, and financial systems. This has created a new geopolitical divide: countries that fear US economic warfare and try to insulate themselves from it, those more concerned about China’s growing ability to wield economic weapons, and a third camp of “swing states” seeking to straddle both worlds, which are at once influential and vulnerable.

Fishman also raises a warning: chokepoints that empower US economic warfare are becoming glaring vulnerabilities for the global economy itself. The unravelling of economic interdependence could push the world into divided blocs, peaceful for now but less stable in the long run. He argues that the US must professionalize its approach to economic warfare, including by building institutional expertise, developing training programs, and even offering academic courses devoted to the subject, if it wants to sustain its advantage. (This advice would be well-heeded even for middle powers that find themselves in influential blocs like the G7 and seek to wield economic power through sanctions.)

Interestingly, Fishman looks to the future of sanctions and export controls, suggesting that they could be applied to global challenges such as climate change or AI governance, given the US’s leverage over finance and advanced technologies. While this suggestion feels divorced from our current reality (where we are all trying to survive the transition of the US into a belligerent and unpredictable autocracy), as we settle into our new reality, it is good advice for those looking to do more than just survive, but also shape the future of humanity.

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Fishman frames an “impossible trinity” of economic interdependence, economic security, and geopolitical competition: only two can coexist, and the likely outcome is a fragmented global economy where great power rivalry persists, with the risk that, in the absence of viable economic tools, conflict could return to the battlefield.

While the book, written before Trump’s return to office, does not account for Trump’s application of sanctions and tariffs against allies, international institutions, and even ICC judges, and how this risks accelerating the decline of US economic power. However, it is prescient in that Fishman rightly points out that measures that instrumentalize the dollar for overtly political ends might undermine the dollar’s role as the reserve currency. He also notes that China’s efforts to promote alternatives, such as the digital renminbi, have so far struggled to gain traction (for now).

Methods: This book differs from our usual Research Reads in that it’s a popular book, rather than an academic one. It traces the historical evolution of economic warfare through the lens of the US and its allies.

Who Should Read this book

This is a well-written, engaging history of US economic warfare. It’s a must-read for anyone interested in the future of conflict and how economics and finance shape the battlefield.

Other references: This book should be read in conjunction with Daniel W. Drezner et al., eds., The Uses and Abuses of Weaponized Interdependence (Brookings Institution Press, 2021).

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This week, my friend and colleague Dan Byman and his coauthor Riley McCabe produced an Atlantic article and an accompanying CSIS report on left-wing terrorism in the United States. It generated a significant uproar, as I’m sure many can imagine. (I had to limit my interactions on Bluesky as a result. Don’t let anyone ever tell you that only X has an echo chamber or political ideology problem.)

Now, the first thing I want to note is the headlines about this article. I don’t know if the authors wrote the Atlantic headline, but it’s a bit misleading. It says “left wing terrorism is on the rise”. Is it? The Washington Post does a fair bit better with the headline “Left-wing actors responsible for more attacks this year…”. This, from what I’ve seen of the data, the second headline is more accurate.

Those not steeped in data might wonder what point I’m making, so let me explain.

The authors collect data from January 1, 1994, to July 1, 2025 and categorize attacks and plots as left and right wing, as well as jihadist and ethnonationalist. This is standard practice: We all make categorization and coding decisions to enable our analysis. The authors are transparent with how they do this, and also note that some attacks defied categorization. (Also normal). You can definitely disagree with coding decisions. In fact, it’s encouraged! Reproducibility is an essential part of the scientific process, so having someone else review your data, recode it, and rerun the analysis can yield truly interesting results. Do they get something similar? Your data, theory, and explanations are robust. Do they get something different? Also interesting and requires investigation!

The authors collected 750 terrorist incidents during this time frame. This is a pretty robust sample. (Remember: terrorism tends to be a small data problem, unlike general crime.) Their data appears to show an increase in left-wing terrorism attacks and plots over this time (Figure 1). I say ‘appears’ because there are no tests for statistical significance noted in the analysis. When I recreated the data and ran tests for statistical significance at 5 and 10-year intervals, there was none. (This means left-wing terrorism is actually stable over time, not increasing.) I didn’t include the first half of 2025 in my analysis because I don’t have data intervals for half years.

Does that mean that the author’s data and conclusions are wrong? Not quite. I just think they’re premature. 2025 might well be a turning point in the data, but it’s too soon to say. (Hence why the second headline is better written than the first.)

I would also say that the authors’ discussion of terrorist incidents, motivation, and the changing political landscape is really good. The only thing I would change is how they characterize the change (or rather, the lack of change) in the number of left-wing attacks, and add tests for statistical significance.

How does this compare to Canada?

Canada and the US tend to have terrorism trends that reflect each other (or rather, Canada tends to lag the US’s overall trend). In Canada, you can see a significant spike in ideologically motivated terrorist attacks in 2017, illustrated in the graph below. Interestingly, this is equal parts attacks from right-wing and left-wing terrorism. (I had to re-code my data to match the authors' definitions, because IMVE terrorism in Canada is both right and left.)

Since 2017, however, there have only been two left-wing terrorist attacks in Canada.1 All the other IMVE attacks have been right-wing.

So, to compare these data with the US, I’d say that Canada has seen a sharp drop-off in left-wing terrorism, while the US’s experience has been steadier. However, like the US, Canada has seen a significant rise in right-wing terrorism. The question is: will this trend persist?

Again, it’s worth reflecting on the authors’ discussion to understand the challenges facing both countries and anticipate what we might expect from terrorism in this country.

We should read this as a warning. Polarization and mis and disinformation fan the flames of extremism, and can increase the pool of people who are willing to commit violence for their beliefs — regardless of their ideology or political affiliation. I would also add that violence tends to beget violence, so when one group becomes more violent, it can also spark a backlash from other groups.

That’s all I have time for this morning, but if you want to see a more robust comparative analysis between Dan’s data and my Canadian data, and a discussion of those results, let me know. (And don’t forget to upgrade to paid to support this type of analysis!)

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~Jess

Research Reads Survey

Don’t forget to check out our courses! We have a growing selection of learning products to choose from, from financial intelligence investigations to terrorist financing analysis. We also have a dedicated financial intelligence community where you can ask questions and learn from your students, and of course, get expert help from me:

Review: Maria Jofre, Alberto Aziani, and Edoardo Villa, “Terrorist Financing: Traditional vs. Emerging Financial Technologies,” Terrorism and Political Violence 0, no. 0 (n.d.): 1–14, https://doi.org/10.1080/09546553.2024.2433635.

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BLUF: Between 2010 and 2020, terrorists primarily used traditional methods to finance their activities (such as banks, hawalas, and high-value goods). Cryptocurrency only accounted for 4% of terrorist financing activity.

Author info: Maria Jofre is a data analyst at Open Ownership and academic. Alberto Aziani is an Associate Professor of Sociology of Law and Deviance at the Department of Sociology and Social Research at the University of Milano-Bicocca. Edoardo Villa is a Consultant in Governance Risk & Compliance - Financial Services at KPMG Advisory S.p.A.

Brief Summary

This study highlights the need to expand research on how terrorists use technology to facilitate financing and the associated threats and risks. Contributing empirical research, this article aims to bridge the gap in understanding the evolving methodologies employed by terrorist financiers. Such research is critical to helping institutions strengthen their capacity to counter terrorist financing by developing a deeper, evidence-based understanding of the modus operandi of those who finance terrorism.

Specifically, this study empirically assesses the financial technologies and methods used by terrorist financiers to transfer funds within and between organizations, focusing on capital movement rather than fund generation. The findings reveal that while there is increasing attention on emerging technologies like cryptocurrencies, terrorist financiers continue to rely predominantly on traditional methods of transferring money.

Methods: The study's methods relied on a comprehensive analysis of data from the LexisNexis WorldCompliance dataset, which initially identified over 90,000 records. Through a rigorous screening process based on eligibility criteria—such as sufficient information, deduplication, relevance of sources, and confirmation of terrorist financing methods—this dataset was refined to include 121 cases of terrorist financing occurring between 2010 and 2020. The researchers adopted a frequentist approach, leveraging keyword-based quantitative analysis and in-depth qualitative analysis.

To assess the robustness of the data, the authors compared general trends in the dataset with the Global Terrorism Index, finding alignment in temporal patterns and peaks, which the authors say supports the reliability of the data over time. The analysis revealed the following breakdown of methods: 54% of cases involved the banking system, 24% used legal entities, 24% relied on hawala systems, 22% engaged high-value commodities, 14% involved money transfer services, while newer technologies like cryptocurrencies, internet payment systems, and e-commerce platforms accounted for 4%, 4%, and 2% of cases, respectively.

The study acknowledges limitations in the dataset, including potential underreporting, an incomplete picture of the prevalence of terrorist financing methods, and the likelihood that emerging trends or technologies might not yet be fully captured due to data lag. These limitations underscore the need for ongoing research to provide a more comprehensive understanding of terrorist financing patterns.

Interestingly, in my book Illicit Money (released in 2021 and based on data up to 2020), I found very similar results. I found that 38% of cases involved the banking system, 19% relied on money service businesses, 22% used high-value commodities and/or trade-based movement, 24% relied on hawala, and 6% relied on cryptocurrency transfers. 1

However, my recent work suggests that cryptocurrency use has increased significantly since 2021.

Who should read this article? This article is a good baseline for anyone seeking to understand terrorist financing methods and mechanisms, and should be read in conjunction with other research in this area including:

Joe Whittaker, “The Role of Financial Technologies in US-Based ISIS Terror Plots,” Studies in Conflict & Terrorism 0, no. 0 (October 12, 2022): 1–26, https://doi.org/10.1080/1057610X.2022.2133345.

Evangeline Ducas and Alex Wilner, “The Security and Financial Implications of Blockchain Technologies: Regulating Emerging Technologies in Canada,” International Journal 72, no. 4 (December 1, 2017): 538–62, https://doi.org/10.1177/0020702017741909.

Cynthia Dion-Schwarz, David Manheim, and Patrick B. Johnston, “Terrorist Use of Cryptocurrencies: Technical and Organizational Barriers and Future Threats” (RAND Corporation, March 27, 2019), https://www.rand.org/pubs/research_reports/RR3026.html.

Jessica Davis, Illicit Money: Financing Terrorism in the 21st Century (Lynne Rienner Publishers, 2021).

Marc-André Argentino, Jessica Davis, and Tore Refslund Hamming, “Financing Violent Extremism: An Examination of Maligned Creativity in the Use of Financial Technologies” (ICSR, April 12, 2023), https://icsr.info/2023/04/12/financing-violent-extremism-an-examination-of-maligned-creativity-in-the-use-of-financial-technologies/.

And of course the various Insight Monitor articles on cryptocurrency and terrorist financing!

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~Jess

Research Reads Suggestions

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Review:  Shai Farber and Snir Ahiad Yehezkel, “Financial Extremism: The Dark Side of Crowdfunding and Terrorism,” Terrorism and Political Violence 0, no. 0 (2024.): 1–20, https://doi.org/10.1080/09546553.2024.2362665.

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BLUF: This article seeks to fill a gap in academic research by describing and explaining how terrorist organizations exploit crowdfunding platforms and digital currencies. The article includes a set of observations about terrorist crowdfunding campaigns that form the basis of policy recommendations.

Author info:  Shai Farber is a senior lecturer at the Max Stern Yezreel Valley College and Snir Ahiad Yehezkel is a student in the faculty of law at Bar-Ilan University.

Brief summary:

Methods: The authors combine open-source material (including academic literature, policy documents, news reports, crowdfunding platform archives, text from extremist communication channels, telegram chats, international conventions, laws, and regulations) with three semi-structured interviews.

Based on this research, the authors make nine key observations: Terrorist crowdfunding campaigns are used to facilitate online payments and payment methods and attract public attention (both increasing the terrorist’s reach and exposing it to potential law enforcement action). Terrorists often launch campaigns soliciting funds for false charitable causes, and they tend to raise modest donations. Terrorists prefer to use small and unpopular crowdfunding sites when they use formal platforms, and multiple credit cards from the same individual are sometimes charged on crowdfunding sites.  Off platform, terrorists sometimes solicit cash. Terrorists also use non-profit organizations as a “front” for raising money but redirect those funds to their accounts. Funds for these campaigns often originate from countries “at risk” or tax havens.

From these observations, the authors propose the following strategies to mitigate the risk posed by terrorist exploitation of crowdfunding sites. They argue that crowdfunding platforms should be regulated and adhere to counterterrorist financing regulations and that platforms should adopt a risk-based monitoring approach for their campaigns. Further, the authors argue that cryptocurrency exchanges should be regulated to help mitigate these risks and that international cooperation should be fostered to help understand and articulate crowdfunding risks. The authors also suggest that technology firms and financial institutions should collaborate to detect and disrupt terrorist financing, making a case for the broader adoption of blockchain analytics tools and technologies. They also suggest that public awareness campaigns should be launched to educate the public about the vulnerabilities of crowdfunding platforms, that crowdfunding regulation and monitoring should be within the scope of Financial Action Task Force mutual evaluations, and that more research money should be allocated to help develop novel technological solutions for detecting and disrupting terrorist financing online.

Who should read this article? This article is a good primer for anyone new to the area of crowdfunding and terrorist financing, and should be read in conjunction with other research in this area including:

• Jessica Davis, “New Technologies but Old Methods in Terrorism Financing,” Royal United Services Institute for Defence and Security Studies, CRAAFT Research Briefing, no. 2 (July 22, 2020): 7.

• Financial Action Task Force, “Crowdfunding for Terrorism Financing,” October 2023, https://www.fatf-gafi.org/content/dam/fatf-gafi/reports/Crowdfunding-Terrorism-Financing.pdf.coredownload.inline.pdf.

• Alex Newhouse, “From Classifieds to Crypto: How White Supremacist Groups Have Embraced Crowdfunding” (Middlebury Institute of International Studies at Monterey, 2019), https://www.middlebury.edu/institute/sites/www.middlebury.edu.institute/files/2019-06/Alex%20Newhouse%20CTEC%20Paper.pdf?fv=9T_mzirH.

• Stephen Reimer and Matthew Redhead, “Bit by Bit Impacts of New Technologies on Terrorism Financing Risks,” Occassional Paper, Project Craaft (Royal United Services Institute, April 2022), https://static1.squarespace.com/static/5e399e8c6e9872149fc4a041/t/624c339b2bb62359821fa1dd/1649161117463/Bit+By+Bit.pdf.

• Smith, Brenna, “The Evolution Of Bitcoin In Terrorist Financing,” Bellingcat, August 9, 2019, https://www.bellingcat.com/news/2019/08/09/the-evolution-of-bitcoin-in-terrorist-financing/.

Advancing the Research

This article is a good starting point for formalizing observations about terrorist financing and crowdfunding. However, differentiation between formal and informal crowdfunding campaigns (those using official platforms and those using messaging services to solicit funds) and categorization of methods and observations between these two types of crowdfunding might have yielded different and interesting results.

Further work should explore the circumstances in which terrorists adopt crowdfunding as a method of raising funds and how states and counterterrorism investigators can anticipate the adoption of this technique. Further research should also collect data more broadly (ideally, interviews with people in multiple jurisdictions) and specify, possibly using a large n set of case studies, how often terrorist actors (movements, groups, and individuals) use crowdfunding and how this differs across ideologies.

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Research Reads Suggestions

Review: Amira Jadoon and Daniel Milton, “Risk and Reward: How Shadow Economies Impact the Financial Practices of Militant Organizations,” Terrorism and Political Violence 0, no. 0 (6 Aug 2024): 1–19, https://doi.org/10.1080/09546553.2024.2381211.

BLUF: This article argues that terrorist groups make strategic choices in fundraising. Groups operating in states with large shadow economies will likely adopt intricate, high-yield fundraising tactics over “hit or miss” methods.

Author info:  Amira Jadoon, assistant professor at Clemson University, and Daniel Milton, Director of Research at the Combating Terrorism Center at West Point

This article seeks to answer the question of how terrorist and insurgent groups or their leaders decide which fundraising options are the most viable and weigh the risks and benefits of associated methods. The presence of a shadow economy in the terrorist or insurgent area of operations is “one of the most important” factors in determining fundraising choice. How terrorist and insurgent groups raise money can be influenced by resource availability, organizational characteristics, and other strategic considerations (p.3).

The authors put forward a plausible hypothesis. There are plenty of examples of terrorist and insurgent groups using shadow (or informal) economies to raise funds (amongst other things, like creating facilitation and smuggling networks for goods and people). Some key examples include Hamas in Gaza, the Islamic State in both Iraq and Syria, the PKK in Türkiye (and later Europe), the LTTE in Sri Lanka, etc.

The article further differentiates between the types of coordination that fundraising methods require. The authors describe high-coordination, reliable payout strategies, such as drug trafficking and smuggling, and low-coordination, unreliable payout strategies, such as extortion, robbery, and kidnapping. They find that high-coordination strategies are more likely to occur in areas with large shadow economies.

Who should read this article? This article is primarily intended for academics and has utility for policymakers trying to combat terrorist financing and understand strategic choices and decision logic.

How does it advance our knowledge?

1.     This article advances our knowledge by mapping the strategic choices of terrorists in terms of fundraising.

2.     Policymakers can anticipate terrorist financing methods to focus on drug trafficking and smuggling in areas with large informal sectors.

Methods: This article is based on a case study (FARC in Colombia) and a quantitative study with data from 1998-2012 covering 130 groups. The authors find a statistically significant relationship between many variables in their five models. These models use different dependent variables (fundraising methods): drug trafficking, smuggling, extortion, robbery, and kidnapping. They convincingly demonstrate that terrorist and insurgent organizations are more likely to pursue high-pay, high-coordination activities like drug trafficking if they operate in states that have large shadow economies (p. 15).

The authors' categorization of fundraising activities provides a useful framework for understanding the complexities of illicit financing. However, classifying certain activities as high-coordination or low-coordination merits further scrutiny. While drug trafficking and smuggling are rightly identified as high-coordination activities, several other activities measured—such as extortion and kidnapping—arguably require similar levels of coordination. For example, groups like the LTTE and Al Shabaab have developed intricate extortion networks, including taxation systems, receipt issuance, and management structures to avoid double taxation. A similar dynamic is present in some Islamic State-controlled areas of Africa. Likewise, kidnapping often involves multiple actors across criminal networks, local populations, and entities providing security.1Acknowledging these complexities could enhance the internal validity of the study's findings and provide a more comprehensive understanding of these activities and the strategic choices that terrorists make in funding decisions.

What’s missing: There is a growing body of work on terrorist adaptation (and financing), as well as economics and terrorist financing, that might have some bearing on future work in this area, particularly the work of Sandler2 and Myers.3

The article doesn’t consider the issue of how counter-terrorist financing efforts affect the strategic choices of terrorist groups. To be fair, no existing dataset of these activities exists that can be included in these models. While I think this is a critical issue (arguably one that has the most bearing on financing choices, including financing activities beyond just fundraising), this is also not easy to model. To understand terrorist decision-making and adaptation, this issue will have to be overcome, and counter-terrorist financing activities will have to be included in future models of terrorist behaviour and decision-making.

Finally, the article raises an interesting question of cause and effect. The authors convincingly demonstrate that terrorists exploit shadow economies. However, is it also possible that terrorist and insurgent groups primarily arise in countries that have large shadow economies, possibly indicative of a lack of governance? Or do shadow economies somehow facilitate the development of terrorist groups? Understanding this relationship further might shed more light on how and if terrorists are really making decisions about fundraising or whether they are simply exploiting whatever is available to them.

Readability: Despite using advanced quantitative methods, this article is surprisingly readable and will be accessible to a general audience. Interpreting the results does, however, require knowledge of econometrics.   

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Research Reads Suggestions

Review: Tereza Østb Kuldova, Compliance-Industrial Complex: The Operating System of a Pre-Crime Society, 1st ed. 2022 edition (Cham: Palgrave Macmillan, 2022).

BLUF: This book argues that the compliance industrial complex fundamentally shapes governance and control mechanisms, influencing how humans are surveilled and managed. It also argues that the compliance function plays an essential role in corporate power and hybrid policing practices.

The compliance industrial complex is the sector (yes, it’s an entire sub-sector of the finance sector of the economy!) that was created following the creation of the Financial Action Task Force and the establishment of global anti-money laundering standards (and, later, counterterrorist financing efforts). The compliance industrial complex is composed of financial institutions, their compliance officers (charged with detecting, preventing, and reporting money laundering and terrorist financing), regulatory technology companies that facilitate this, as well as policymakers, consultants, and academics and researchers studying policies, regulations, and practices.

This complex is described as shaping how people are governed, how they can interact with the financial system, and how they are controlled in that context.

As you can no doubt tell from the tone, this book takes a critical studies approach to regulation and surveillance. I know some of you will find that tone off-putting, so it can be useful to remember that this approach to research and analysis is meant to challenge conceptual frameworks and perspectives. It’s ~meant~ to be provocative. So when you read this, it’s useful to think about what the author is trying to challenge and why.

Who should read this book? It is largely targeted at academics but could also be interesting for policymakers and compliance professionals.

How does it advance our knowledge?

1. The critique of the language of compliance. The compliance industrial complex tends to use universalized terms of good governance such as integrity, transparency, accountability, and risk, but upon closer examination, these terms are “strikingly hollow.” (p.25) (I’ve often wondered what the phrase “protect the integrity of the financial sector” actually means.)

2. Critique of “tech optimism”: The author finds that there is little evidence to support the role of AI in advancing compliance outcomes, and the compliance industry tends to fetishize data-driven predictions despite “false expertise and bogus promises” that are sold under a myth of neutrality and objectivity. (p. 123-9)

3. The complexity of the regulatory environment: The author identified some people in the compliance industry and found that the regulatory environment is so complex that it is beyond the capacity of a single human to process. This creates an open question about what and who this is serving. The complexity further requires incorporating increasingly complex technological solutions into the compliance function, regardless of the evidence to support their efficacy.

Methods: This essay is based on an anthropological study of compliance professionals, primarily through attendance at webinars and conferences and through interviews. There is insufficient detail on methods to judge whether a similar study would come to the same conclusions. It’s also unclear about the geographic scope of this research and whether the findings apply across different jurisdictions.

What’s missing: A fairly robust critical studies approach to anti-money laundering and counter-terrorist financing exists. Many of you might be familiar with the work of Marieke de Goede or Anthony Amicelle. Surprisingly, this book does not engage with that literature.

Readability: This book targets an academic audience and assumes some knowledge and familiarity with critical studies as a discipline.

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