ISIS Terror Affiliates Raising Millions Of Through Cryptocurrencies

Key Points:

• Blockchain analytics firm TRM Labs reports that terrorist groups associated with ISIS are increasingly using cryptocurrencies for fundraising.
• Pro-ISIS groups in Tajikistan raised around $2 million in Tron-based USDT during 2022, with the funds used for recruiting fighters for ISIS’s affiliate in Afghanistan.
• TRM Labs also identified pro-ISIS groups in Indonesia and Pakistan raising significant amounts through cryptocurrency for their illicit activities and fundraising campaigns.

Blockchain analytics firm TRM Labs has released a report stating that terrorist groups associated with ISIS are increasingly using cryptocurrency for fundraising and other illicit activities.

The report highlights several instances of pro-ISIS groups in different regions leveraging cryptocurrencies for their operations.

According to TRM Labs, in Tajikistan, multiple pro-ISIS groups raised around $2 million in Tron-based USDT in 2022. These funds were used for recruiting fighters for ISIS’s affiliate in Afghanistan, known as the Islamic State-Khorasan Province (ISKP). TRM Labs traced the money to an unnamed centralized exchange, which was subsequently notified about the illicit activities. As a result, Turkish authorities arrested a senior fundraiser, Shamil Hukumatov, who was allegedly behind the fundraising campaign.

Another pro-ISIS group managed to raise over $517,000 using an account on an Indonesia-based exchange. The group’s campaign aimed to free members held in Syrian internment camps. Interestingly, the donations to this campaign were often made in substantial amounts, around $10,000 each.

TRM Labs also discovered that those affiliates in Pakistan raised approximately $40,000 over the past year, pretending to help victims of the earthquake in Turkey and Syria in February 2023. These funds were obtained through fraudulent fundraising campaigns.

The report further reveals that the al-Azaim Foundation for Media Production, a pro-ISIS media organization in Afghanistan, also utilized cryptocurrencies for fundraising purposes. TRM Labs identified wallets controlled by the group that received $10,000.

The use of cryptocurrencies by terrorist groups for fundraising and illicit activities poses significant challenges for authorities and financial institutions. TRM Labs’ report sheds light on the evolving tactics employed by these groups to exploit the anonymity and decentralized nature of cryptocurrencies for their nefarious activities.

It is worth noting that the US Treasury Department’s Office of Foreign Asset Control (OFAC) previously sanctioned five Indonesian nationals in May 2022 for facilitating money transfers from Indonesia to members in Syria. This highlights the ongoing efforts of authorities to address the use of cryptocurrencies in funding terrorist activities.

As terrorist groups continue to innovate their fundraising methods, blockchain analytics firms and law enforcement agencies are working tirelessly to track and disrupt their operations, safeguarding the integrity of the crypto ecosystem and global security.

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